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2000 DIGILAW 510 (BOM)

Metal Rolling Works Pvt. Ltd. v. General Labour Union (Red Flat) and another

2000-07-20

A.M.KHANWILKAR

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JUDGMENT - A.M. KHANWILKAR, J.:---This writ petition under Articles 226 and 227 of Constitution of India is directed against the judgment and order passed by the Industrial Tribunal, Mumbai dated 13th August, 1986 in Reference (II) No. 26 of 1985. 2. Briefly stated the facts leading to the present petition are as under : The petitioner is a company incorporated under the Companies Act and carries on business of converting aluminium ingots into aluminium sheet, circles, strips and slugs at its factory situated at Sion, Mumbai. The 1st respondent is a registered trade union, which at the material time represented the workmen of the petitioner factory. That prior to 1983 the workmen of the petitioner were represented by a union known as SHRAMIK JANATA SANGH (hereinafter referred to as SJS Union). The said union addressed certain charter of demand vide letter dated 5-7-1982 dated 14-7-1982. Since no argument/settlement could be reached in respect of the said demands, the petitioner offered to refer the demands of the union for adjudication under section 10(2) of the Industrial Disputes Act, by its letter dated 22-6-1983. While the proposal for reference was pending under consideration, the workmen of the petitioner left the said SJS union and joined another trade union known as Association of Engineering Workers (hereinafter referred to as AEW Union). The said new union raised charter of demands vide letter dated 17-9-1983. The workmen under the advice, active support and instigation of the AEW Union started resorting to several unfair labour practices such as wilful go slow, coercive actions like blocking movement of vehicles carrying goods in and out of the factory, shouting of filthy slogans etc. These illegal activities were continued by the workmen since November 1983 to December 1983 which forced the petitioner to bring the same not only to the notice of the said AEW Union but also to the Commissioner of Labour vide petitioner's letter dated 21-1-1983, 23-11-1983, 24-11-1983, 1-12-1983 and 7-12-1983. Since the said illegal activities were continued, the petitioner eventually filed a complaint under the Maharashtra Recognition of Trade Unions and Prevention of Unfair Labour Practices Act, 1971 (hereinafter referred to MRTU PULP Act) being complaint (ULP) No. 861 of 1983 alleging unfair trade practice against the said union and 13 workmen. Since the said illegal activities were continued, the petitioner eventually filed a complaint under the Maharashtra Recognition of Trade Unions and Prevention of Unfair Labour Practices Act, 1971 (hereinafter referred to MRTU PULP Act) being complaint (ULP) No. 861 of 1983 alleging unfair trade practice against the said union and 13 workmen. The Tribunal granted ad interim injunction against the said union and 13 workmen from resorting to coercive action as prayed for in the interim relief application vide order dated 14-12-1983. The said interim order was brought to the notice of the union and the workmen of the company vide notices dated 15-12-1983, 19-12-1983, 24-12-1983, 26-12-1983 and 27-12-1983 respectively. In spite of the aforesaid ad interim injunction granted by the Tribunal, the workmen continued to indulge in illegal and unfair trade practice which affected even the neighbouring factory viz. M/s. Alco Metal Extrusions Ltd. In the circumstances, the said M/s. Alco Metal Extrusions Ltd. made a complaint in writing to the Commissioner of Labour dated 27-12-1983 regarding the illegal acts of the workmen of the petitioner's factory alleging that the working of its own factory was being interfered with. The matter did not rest here. The situation became so deteriorated at the work place that it led to a serious apprehension in the mind of the petitioner's management and executive staff as well as to the property of the petitioner. The petitioner was thus left with no other option but to resort to some presumptive action to prevent any untoward eventuality. The petitioner issued notice dated 30-12-1983 suspending its operation with effect from 10-00 p.m. on 30-12-1983. The petitioner simultaneously gave a notice of lock out under section 24(4) of MRTU PULP Act by which the lock out was to become operative on and from 16-1-1984. It is contended that the suspension of operation of the factory by the petitioner company as a preamptive measure cannot be said to be a lock out within the meaning of section 2(1) of Industrial Disputes Act. After giving the aforesaid notices, immediately on 6-1-1984, the petitioner moved another complaint under MRTU PULP Act, alleging unfair labour practice against the union and 13 workmen and sought for an order restraining them from indulging in any coercive activities. The Tribunal by order dated 10-7-1984 restrained the union and the workmen of the petitioner factory from indulging in any coercive activities. 3. The Tribunal by order dated 10-7-1984 restrained the union and the workmen of the petitioner factory from indulging in any coercive activities. 3. That in the meantime the AEW Union filed a complaint being Complaint (ULP) 7 of 1984 alleging therein that the lock out was illegal and unjustified. In the said complaint an application praying for interim relief against the petitioner company was filed in which the Tribunal by its ex parte order dated 5-1-1984 was pleased to restrain the petitioner company from removing any goods etc. from the factory premises. The said ex parte order was however modified by the Tribunal on 25-1-1984 by permitting the petitioner to take away the finished goods from the factory premises. That later on the Government of Maharashtra issued an order dated 16th February, 1985, purporting to be an order of reference, referring the dispute with regard to the legality and justifiability of the lock out, to the Industrial Court for adjudication under section 10 of the Industrial Disputes Act. The said reference was numbered as Reference (II) No. 26 of 1985. Simultaneously an order under section 10(3) of the Act was issued by the State Government prohibiting the petitioner company from continuing the lock out. The relevant portion of the said order is reproduced hereunder as the same will have bearing on the rival submissions which would be considered at a later stage. "Now, therefore, in exercise of the powers conferred by sub-section (3) of section 10 of the aforesaid Act, the Government of Maharashtra hereby prohibits the continuance of the lock out in connection with the dispute aforesaid (being a lock out which was in existence on the date of which the dispute was referred to the said Tribunal for adjudication." 4. The petitioner has rightly made a grievance that on reading the said order it does not indicate as to the changed circumstances in which the same has been made by the Government in exercising of its powers under section 10(3) of the Industrial Disputes Act. There is no mention in the said order that the State Government was satisfied about the prevailing situation that would ensure discipline and normalcy in production by the workers. It is pertinent to mention at this stage that the workmen of the petitioner in or about the same time in February 1985 changed the AEW union and joined the 1st respondent union herein. It is pertinent to mention at this stage that the workmen of the petitioner in or about the same time in February 1985 changed the AEW union and joined the 1st respondent union herein. The 1st respondent by its letter dated 22-2-1985 for the first time assured the petitioner in writing that the workmen would extend full co-operation and ensure smooth working of the factory and also of normal production. The said letter proceeds on the premise that in view of the assurance, the petitioner may indicate the exact date when the workmen should enter the factory and to provide for the schedule of the respective workman, so as to enable the workmen to carry on the manufacturing activities and to give maximum production. In response to the said letter the petitioner gave a reply on 23-2-1985 and informed the 1st respondent union that the request made by the workmen was being seriously considered. After some deliberations the petitioner informed the 1st respondent union, by letter dated 27-2-1985, that in view of the assurance of the smooth working and normal production, the petitioner has authorised its Advocate to discuss personally in detail regarding the manner and method of restarting the factory, as the petitioner has decided to lift the lock out as per Government Order dated 16-2-1985. It is stated that thereafter discussion was held between the president of the 1st respondent union and the Advocate for the petitioner, pursuant to which by notice dated 28-2-1985 the petitioner called upon 117 workmen named therein to report on duty on 4-3-1985 for the purpose of cleaning, oiling for normal resumption of work of factory from 9-3-1985 in 3 shifts. There is no dispute that workmen reported at the factory and started working normally with effect from 9-3-1985. 5. The 1st respondent union filed statement of claim before the Tribunal in the reference made by the State Government. The petitioner filed written statement, inter alia contending that the lock out declared by the petitioner did not amount to lock out as defined under section 2(1) of the Industrial Disputes Act and thus the reference was not maintainable but barred by section 59 of MRTU PULP Act. The petitioner filed written statement, inter alia contending that the lock out declared by the petitioner did not amount to lock out as defined under section 2(1) of the Industrial Disputes Act and thus the reference was not maintainable but barred by section 59 of MRTU PULP Act. It was contended that in view of the pendency of Complaint (ULP) 7 of 1984 filed by AEW union, coupled with the fact that the shut down of operation and lock out was only a pre-emptive action on the part of the petitioner in order to avoid harm to the property and personnel of the petitioner, the reference was not maintainable. Both the parties filed document in support of their rival claims. That an application for interim relief was moved on behalf of the 1st respondent, which was rejected on 16-12-1985 by Part I of the Award. This Part I of the Award has remained unchallenged. 6. The reference before the Tribunal proceeded further in which besides producing documents, the petitioner company examined its factory Manager Shri S.R. Shah. On the other hand, the 1st respondent did not adduce any oral evidence. The Tribunal was pleased to pass an Award on the said reference on 13-8-1986. The Tribunal held that lock out which commenced from 16-1-1984 and continued thereafter was legal, proper and justified and as such the workmen were not entitled to any wages or other benefits for the lock out period. However, with regard to the issue of prolongation of the period, the Tribunal took the view that the petitioner was not reasonably justified in not taking prompt action from the date of Government Order under section 10(3), i.e. from 16-1-1985 to 28-2-1985, and for that reason directed the petitioner to pay the workmen compensation equivalent to 10 days wages. It is this later part of the Award, that is seriously under challenge by the petitioner before this Court. According to the petitioner, having regard to the facts of the case, it cannot be said that the petitioner had acted unreasonably or had failed to take prompt action to restart the factory. According to the petitioner the reasons recorded by the Tribunal while concluding that the petitioner acted unreasonably in not taking prompt action to restart the factory are self contradictory and cannot be sustained. 7. According to the petitioner the reasons recorded by the Tribunal while concluding that the petitioner acted unreasonably in not taking prompt action to restart the factory are self contradictory and cannot be sustained. 7. Be that as it may, to complete the narration of events, it may be noted that the said Award was published on 19-3-1987 as per section 18 of the Industrial Disputes Act. Being dissatisfied by the said Award the petitioner filed writ petition under Articles 226 and 227 of Constitution of India thereby challenging the later part of the Award which has fastened liability on the petitioner to pay compensation to the workmen equivalent to 10 days wages for the period between 16-2-1985 till 28-2-1985. When the said writ petition was admitted on 18-8-1987 this Court directed the petitioner to deposit the amount towards compensation before the Labour Court within one month with liberty to the employees to withdraw the amount due to them after furnishing security to the satisfaction of the trial Court and if employees failed to withdraw the amount within 2 months the same was to be deposited in a Nationalized Bank. 8. The learned Counsel for the petitioner has mainly argued that applying the ratio of the decision of this Court in (Mafatlal Engineering Industries Ltd. v. Association of Engineering Workers and another)1, reported in 1983(46) F.L.R. 429 the Tribunal ought to have held that the suspension of operation of the factory in the present case did not amount to lock out and as such there was no question of paying compensation to the workmen on any count, leave alone on the ground that the petitioner was not unreasonably justified in not taking prompt action of restarting the factory. The learned Counsel has referred to the definition of lock out in section 2(1) of the Industrial Disputes Act, to butteress the aforesaid submission. It is next contended that on careful examination of the reasons recorded by the Tribunal it would be evident that the reason for holding that the petitioner was not justified in not taking prompt action to restart the factory after Government Order dated 16-2-1985 till 28-2-1985 are self contradictory and inconsistent and cannot be sustained in law. It is next contended that on careful examination of the reasons recorded by the Tribunal it would be evident that the reason for holding that the petitioner was not justified in not taking prompt action to restart the factory after Government Order dated 16-2-1985 till 28-2-1985 are self contradictory and inconsistent and cannot be sustained in law. It is further contended by the learned Counsel for the petitioner that from the material on record it was more than evident that the lock out was forced upon the petitioner and therefore it cannot be said that the petitioner was not justified in suspending the factory operation. According to the petitioner, after the Government Order was passed on 16-2-1985, the petitioner had to deliberate with the respondent union and it is only when the respondent union expressly agreed to give an undertaking and assured of smooth working of the factory peacefully and of normal production, only then the petitioner could consider in terms of restarting the factory, especially having regard to the past experience which led to the suspension of the factory operation. It is thus contended that in the peculiar facts of the present case it cannot be gain-said that the petitioner was responsible for prolongation of the lock out beyond 16-2-1985 and the petitioner cannot be held responsible and liable to pay the compensation. Reliance has also been placed on the decision of the Apex Court reported in 1995 Bank.J. (S.C.)204 (Syndicate Bank and another v. K. Umesh Nayak and others)2, as well as on A.I.R. 1960 S.C. 893 (V 47 C 155) (Management of Kairbetta Estate, Kotagiri P.O. v. Rajamanickam)3, and A.I.R. 1976 S.C. 2584 (Priya Laxmi Mills Ltd. v. Mazdor Mahajan Mandal, Baroda)4. Reliance has also been placed on the decision of this Court in 1971(I) L.L.J. page 77 (Bom.H.C.) in (Engineering Mazdoor Sabha v. Taki Bilgrami)5. The petitioner has vehemently submitted that the writ petition be allowed and the directions of the trial Court to pay compensation to the workman equivalent to wages for the period from 16-2-1985 to 28-2-1985 be set aside and for a consequential order of refund of the amount which was deposited by the petitioner pursuant to the order of this Court dated 18-8-1987. 9. 9. Having considered the above submissions, I am of the view that it would not be unnecessary to go into the wider question agitated by the petitioner that suspension of the factory operation and consequential lock out by the petitioner cannot be said to be a lock out as defined in section 2(1) of the Industrial Disputes Act. In my view, the petitioner is bound to succeed on the submission that from the evidence on record it would be more than evident that the suspension of the factory operations as well as the lock out was forced upon the petitioner company by the workmen and as such neither the lock out nor the subsequent prolongation of restarting the factory even after the Government order dated 16-2-1985 till 28-2-1985 cannot be said to be illegal or unjustified. If the petitioner is right in this submission then the question of petitioner being liable to pay compensation equivalent to wages for the said period would be wholly unwarranted and without authority of law. Before I proceed to discuss on this aspect, it would be relevant to notice that the Tribunal has positively recorded that the petitioner company repeatedly gave notices and warnings to the workmen for not to resort to illegal and unfair activities, but in spite of several notices including the injunction order of the Court, the workmen continued to indulge in unfair labour practices. The Tribunal has therefore held that the petitioner was justified in giving notice of lock out and resorting to lock out and suspension of factory operations. The Tribunal has also held that notices were displayed from time to time requesting the workmen to stop the various unfair trade practices but had no effect which forced the petitioner company to resort to suspension of work and give notice of lock out. The Tribunal has also positively held that from the materials on record it cannot be said that prolongation of the lock out was unjustified or improper and that the petitioner company cannot be blamed for not lifting the lock out as the workmen had never approached the petitioner inspite of appeal by the petitioner for lifting the lock out. The Tribunal has also positively held that from the materials on record it cannot be said that prolongation of the lock out was unjustified or improper and that the petitioner company cannot be blamed for not lifting the lock out as the workmen had never approached the petitioner inspite of appeal by the petitioner for lifting the lock out. The Tribunal although referred to the decision reported in 1971(1) L.L.J. 77 while accepting the petitioner's contention that the petitioner was not responsible for prolongation of the lock out in that the workmen had at no point of time approached the petitioner company for lifting the lock out for assuring the company of normal working, however, while applying the said principle with regard to the period between 16-2-1985 to 28-2-1985 the approach of the Tribunal has been totally different and inconsistent. Although the Tribunal has rightly held in so many words that the petitioner company was entitled to exclude some days required for making arrangement for starting the factory again, however, the fact that the petitioner was intently occupied in negotiating with the workmen between 16-2-1985 and 28-2-1985 for working out the modalities of restarting the factory, has been clearly overlooked. The Tribunal has completely erred in assuming that after the order came to be passed by the State Government on 16-2-1985 the petitioner company did not take any initiative to reopen the factory until the workmen contacted the petitioner company and requested to permit them to enter the factory premises, which decision was taken by the petitioner only on 28-2-1985. The said approach of the Tribunal is wholly unsustainable as it clearly overlooks the fact that the petitioner company was forced to suspend the operation of the factory and resort to lock out on account of the illegal and unfair activities of the workmen. Moreover, undisputedly, the workmen never approached the petitioner company to remove the lock out nor gave assurance to the petitioner that they would maintain discipline and give normal production which was the sine qua non for restarting the company. Moreover, undisputedly, the workmen never approached the petitioner company to remove the lock out nor gave assurance to the petitioner that they would maintain discipline and give normal production which was the sine qua non for restarting the company. In my view, the petitioner is right in contending that it was not bound to immediately act upon the order passed by the State Government, purported to be under section 10(3) of the Act dated 16-2-1985, particularly when the said order does not reveal as to what circumstances weighed with the State Government to unilaterally direct the petitioner to restart the operation of the factory; and in any case until the petitioner was satisfied with the assurance of the workmen that they would maintain discipline and give normal production. On the other hand there is ample material on record to show that management of the petitioner had reason to entertain apprehension that the workmen would create untoward situation, on account of the past attitude of the workmen. In the circumstances, unless the workmen were to give an express undertaking and assurance that they would maintain discipline and would give normal production, the question of restarting the factory was totally ruled out. In any case neither the order passed by State Government dated 16-2-1985 indicate nor there is any other material to indicate that the workmen gave such assurance to the petitioner of maintaining the discipline and good conduct and normal production until by letter of the President of 1st respondent union dated 22-2-1985. It is also matter of record that on receipt of the said letter, the petitioner immediately responded positively and started interacting with the 1st respondent union and it is only when the 1st respondent union gave assurance to the satisfaction of the petitioner that the workmen would maintain discipline and good conduct and give normal production, immediately thereafter the petitioner took a decision to restart the factory on 28-2-1985. In other words, from 16-2-1985 till the petitioner company took decision to lift the lock out on 28-2-1985, deliberations were held between the petitioner and the 1st respondent and when all the issues were completely sorted out between them inter se the decision to start the factory was taken. In my view, the time spent from 16-2-1985 till 28-2-1985 will therefore have to be treated as time required for making arrangement for starting the factory. In my view, the time spent from 16-2-1985 till 28-2-1985 will therefore have to be treated as time required for making arrangement for starting the factory. Inasmuch as deliberations and interaction between the petitioner and its workmen was absolutely necessary for ensuring peaceful working. In my view, there is no qualitative difference between time spent for reorganizing the factory premises viz. oiling, cleaning of machinery for normal resumption of work on account of long drawn suspension of work since December 1983 which was for a period of more than one year, and the time spent for interaction between the management of the petitioner and office bearers of the respondent company for working out the modalities of lifting the lock out and making the factory operational. For the aforesaid reasons, I am of the view that the conclusion reached by the Tribunal that the petitioner was liable to pay compensation equivalent to wages to the workmen for the period between 16-2-1985 till 28-2-1985 is unsustainable. 10. The learned Counsel for the petitioner has rightly contended that lock out can be described as the antithesis of a strike. This expression has been accepted by the Apex Court in the decision reported in A.I.R. 1960 S.C. 893. The petitioner is right in contending that since the petitioner company had a valid demand against the workers to refrain from indulging in mischievous unfair activities and since the workmen did not respond to the said demand, therefore, the petitioner was left with no alternative but to resort to the weapon of lock out to persuade the workmen by this coercive process, to see its point of view and to accept the said demand. 11. The learned Counsel for the petitioner has therefore rightly relied on the decision of the Apex Court in Syndicate Bank and another v. K. Umesh Nayak and others to contend that by applying the principle underlying the said judgment it would be open for the petitioner to argue that since the lock out was legal and forced upon the petitioner, therefore, the petitioner would not be liable to pay any compensation equivalent to wages, even in respect of the period after the order of State Government under section 10(3) dated 16-2-1985 till the decision to lift the lock out is taken on 28-2-1985, as the said period has been spent for valid and justified reason. I find force in the argument of the learned Counsel for the petitioner that since it is well settled that lock out can be described as anti-thesis of a strike, therefore, the principle which would govern the liability of an employer with regard to the strike, the same would apply proprio vigore to a lock out. In the circumstances, applying the principle underlying the decision of the Apex Court in Syndicate Bank's case, to the facts of the present case, the workmen are not entitled for any compensation equivalent to wages for the disputed period. The Tribunal has clearly misdirected itself in making the petitioner company liable to pay compensation to its workmen for the disputed period. The reasons recorded for fastening such a liability are wholly unsustainable and error apparent on the face of the record. Apart from the documentary evidence, even in the oral evidence led on behalf of the petitioner by examining the factory Manager Shri S.B. Shah, the petitioner has placed on record that it is only after assurance given by Mr. Shastri, the President of 1st respondent union, in writing on 22-2-1985 that the workers would work with discipline and would give normal production, the management of the petitioner took a decision to lift the lock out (see para 8 of the deposition of Shri S.B. Shah). That although this witness examined on behalf of the petitioner had offered-explanation for time spent after 16-2-1985 till 28-2-1985, but in the cross examination no suggestion has been put by the 1st respondent to even remotely suggest that during the said period the petitioner intentionally delayed in taking steps or was negligent in lifting the lock out during this period. In absence of any such case made out by the respondent, it was not open for the Tribunal to record a positive finding that petitioner company was liable to pay compensation equivalent to wages for the said disputed period. 12. In my view, merely because the State Government had issued an order on 16-2-1985, that by itself did not create any right in favour of the workmen to attend to their work unless and until they had fulfilled other terms of employment express or implied. 12. In my view, merely because the State Government had issued an order on 16-2-1985, that by itself did not create any right in favour of the workmen to attend to their work unless and until they had fulfilled other terms of employment express or implied. In the present case it was expected of the workmen, having regard to the past conduct, to offer an express assurance and undertaking to the management of the petitioner that they would maintain discipline and give normal production, only after such assurance or undertaking was given by the workmen that the responsibility or liability of the petitioner to lift the lock out can be said to have commenced. In the present case, it is matter of record that after the order dated 16-2-1985, for the first time the 1st respondent union by letter dated 22-2-1985 gave such an undertaking or assurance to the petitioner. On receipt of the said undertaking immediately on the next date the petitioner appreciated the gesture of workmen and responded favourably. As a matter of fact deliberations took place between the 1st respondent and the representative of the petitioner and final decision was taken deciding about schedule for restarting and lifting of the lock out which was translated into action in the shape of letter dated 28-2-1985. In the circumstances, it cannot be said that the said period was spent by the petitioner unjustifiably so as to make the petitioner liable to pay compensation as has been erroneously done by the Tribunal. In my view, for fixing the liability on the management for paying compensation the pre-condition for entitling any workman for the wages ought to be complied in the same manner. For this purpose it would be appropriate to refer to the definition of wages in the Industrial Disputes Act. Section 2(rr) postulate that 'wages' means all reimbursement capable of being expressed in terms of money, which would, if the terms of employment, express or implied, were fulfilled, be payable to a workman in respect of his employment or of work done in such employment. In the present case since the terms of the employment were not fulfilled by the workmen, therefore, they were not entitled for any wages and naturally for compensation which would be equivalent to wages for the disputed period. 13. In the present case since the terms of the employment were not fulfilled by the workmen, therefore, they were not entitled for any wages and naturally for compensation which would be equivalent to wages for the disputed period. 13. In the circumstances the writ petition will have to be allowed and the Award passed by the tribunal dated 14-8-1986 in Reference No. (II) 25 of 1985 modified to the extent that the finding and conclusion recorded that the petitioner company was not reasonably justified in not taking prompt action from Government Order (i.e. 16-2-1985, till 28-2-1985) for lifting the lock out is set aside. Consequently the directions issued by the Industrial Tribunal to the petitioner company to pay compensation to the workmen equivalent to their 10 days wages is also set aside. 14. It is further ordered that the petitioner would be entitled for the refund of amount which has been deposited by the petitioner in the Court pursuant to the interim order passed by this Court on 18-8-1987 along with interest thereon, if any. The Labour Court is directed to take steps for immediate recovery of the amount from the employees, if the same has already been paid and in the event the amount is invested with the nationalised bank, the same may be encashed along with interest accrued thereon and in either case make over the said amount to the petitioner company forthwith. 15. For the aforesaid reasons, writ petition is allowed in the above terms with no order as to costs. Rule made absolute. Certified copy expedited. Parties to act on the copy of this order duly authenticated by Sheristedar of this Court. Writ petition allowed. -----