Industrial Papers (Assam) Ltd. Employees Union v. Presiding Officer, Labour Court
2003-12-10
AFTAB H.SAIKIA, P.P.NAOLEKAR
body2003
DigiLaw.ai
JUDGMENT A.H. Saikia, J. 1. This writ appeal has been directed against the impugned common judgment and order dated 7.5.2002 passed by the learned single Judge wherein W.P. (C) No. 1805/01 preferred by the Respondent No. 2 the Management of the Assam Industrial Development Corporation (for short the "AIDC") was allowed dismissing W.P. (C) No. 3424/01 filed by the Appellant, the Industrial Papers (Assam) Ltd. Employees Union of the Industrial Papers (Assam) Ltd. ("IPAL" in short), holding that as there was a clear cut finding in the award passed by the Labour Court to the effect that the workmen were not employees of AIDC, question of giving them benefit as done by the Labour Court did not arise and consequently the part of the award in issue No. 3 was quashed. 2. The Appellant, being the registered Trade Union, looking after the welfare of its members employed by AIDC in its Extensible Sack Kraft Paper Project (for brevity's sake, called as ESKPP") under IPAL, raised a dispute for nonpayment of salaries of its members by AIDC after October. 1998 on the plea that the members of the Appellant were not the employees of AIDC but of the IPAL. Accordingly the appropriate Govt. vide Notification dated 20.2.99 referred the following issues to the labour Court for adjudication. The issues are quoted below. 1. Whether the management of Assam Industrial Development Corporation is justified to deny as owner of the Sack Kraft paper Project of M/s Industrial paper (Assam) Ltd. 1 (IP(A)L), though they have signed an agreement with a contractor as "owner" of the Sack Kraft Paper Project, Dhing, District, Nagaon, Assam. 2. Whether the Assam Industrial Development Corporation AIDC is justified to deny to take the responsibility of the Industrial Paper (Assam) Ltd/employees, though the employees were appointed by the AIDC through the advertisement published in the News Paper. 3. Whether the management of AIDC is justified by not absorbing or engaging the employees of the IP(A)L in their other promoted industries or give them salary regularly though they have failed to install or the run the proposed paper Mill in Dhing, Nagaon. 4. If not the said affected employees are entitled for either regular monthly salary from the management or absorption in the other industrial Units promoted by the Assam Industrial Development Corporation, Guwahati. 5.
4. If not the said affected employees are entitled for either regular monthly salary from the management or absorption in the other industrial Units promoted by the Assam Industrial Development Corporation, Guwahati. 5. And the AIDC should not recruit or appoint new employees to say other their Promoted Industries until and unless the employees of the Industrial Paper are engaged or absorbed by the Management. 3. The Labour Court issued notice dated 22.5.99 to the respective parties to the alleged disputes. In pursuance of the notice, both the AIDC and the Appellant filed their respective written statements and additional written statements. AIDC, in their written statement, raised preliminary objection, specifically with the issues under reference, inter alia, questioning the maintainability of the reference stating that the Notification referring the dispute is not an industrial dispute within the meaning of Industrial Disputes Act, 1947 (hereinafter called as the "Act") and the Notification issued by the Govt. cannot constitute an industrial dispute because the AIDC was not a proper or necessary party and the employees of the Appellant, being employees of a separate company i.e. IPAL, cannot claim to be employees of AIDC which was only a Promoter Company. 4. Apart from the preliminary objection so raised as mentioned above, AIDC gave its reply against all those issued. Regarding issue No. 1, it was stated that AIDC, being a promotional organisation, had also promoted the IPAL by signing various documents and agreements with IPAL since it was in the nascent stage for the project for protection of ESKPP at Dhing. The role of AIDC was merely to assist IPAL as it was a promoter for setting up its project. AIDC claimed that under no circumstances AIDC could be called as owner of the project because EPAL was a separate Company registered under the Companies Act, 1956 with an independent Board of Directors having its separate Memo and Article of Association. In support of its claim, AIDC mentioned that the Govt. of Assam vide Notification dated 23.2.88 re-constituted the Board of Directors of IPAL. In so far as issue No. 2 is concerned, it was stated that since the ESKPP of IPAL was not owned by AIDC, the Appellants were the employees of IPAL and AIDC, being a nodal agency of the State Govt.
of Assam vide Notification dated 23.2.88 re-constituted the Board of Directors of IPAL. In so far as issue No. 2 is concerned, it was stated that since the ESKPP of IPAL was not owned by AIDC, the Appellants were the employees of IPAL and AIDC, being a nodal agency of the State Govt. for implementation of various projects as promoter only, cannot be saddled with any responsibility of the employees of IPAL and the Appellant's employees were not the employees of the AIDC. Besides IPAL, the AIDC promoted more other companies like Fertichem Ltd., Assam Syntex Ltd., Assam Petrochemicals Ltd. etc. and those are managed by their independent Board of Directors. The employees who were claimed by the Appellant to be the employees of AIDC, on being appointed in pursuance of the advertisement, were not the workmen as defined under the Act. According to them, none of 11 categories of posts advertised, mentioned in the reference itself, were workmen as defined under the Act and the persons appointed against those posts had not raised dispute. Such dispute had only been raised by the IPAL Employees Union, the Appellant, which did not represent the persons appointed, as per the advertisement. As regards issue No. 3, the contention of AIDC was that they were already overstaffed for which Voluntary Retirement Scheme had already been introduced to reduce excess manpower and as such the absorption of employees of IPAL in AIDC did not arise. With regard to issue No. 4, AIDC stated that AIDC as a promoter was not liable for payment of salaries to the employees of IPAL which was a separate and distinct Company. On issue No. 5, the stand of AIDC was that due to the precarious financial position, the question of fresh recruitment did not come. 5. The Appellant in their written statement alleged that the ESKPP was owned by AIDC inasmuch as ESKPP being established under the licence obtained from the Central Govt. under the Industries (Development and Regularisation) Act, 1951 (for short, 'the Industries Act'), AIDC cannot claim that they established the said project as a 'promoter' as they failed to show that the Industrial Licence obtained by them was either transferred or revoked at that stage.
under the Industries (Development and Regularisation) Act, 1951 (for short, 'the Industries Act'), AIDC cannot claim that they established the said project as a 'promoter' as they failed to show that the Industrial Licence obtained by them was either transferred or revoked at that stage. According to them, AIDC also admitted that ESKPP was ever amalgamated with any other companies under the Companies Act and as such, the AIDC remained the 'owner' for the said project even under the Act itself and no further document or any evidence was necessary to prove the same from the Appellant's side. Accordingly it was pleaded that issue No. 1 should be decided in favour of the Appellant holding that AIDC was not justified in denying the ownership of the project. Regarding issue No. 2, it was alleged that since AIDC was owner of the project, it could not deny its responsibilities to its employees who were appointed in the project. In so far as issue No. 3 and 4 are concerned, it was claimed that the AIDC, being the owner of the project, was liable to pay regular salaries to its workmen. As regards issue No. 5, it was submitted that AIDC should be restrained from recruiting or appointing new employees until and unless the employees of IPAL were engaged or absorbed by AIDC. 6. After filing of their respective written statements and additional written statements, the evidences were adduced by both the parties. When the Appellant examined only one witness, AIDC examined as many as 5 witnesses. The learned Presiding Officer, the Labour Court after hearing the learned Counsel for the parties by his order dated 12.1.2001 passed an award. The Labour Court, in its award, decided the issue No. 1 against AIDC observing that there was no document on records to show that AIDC transferred ESKPP to the IPAL at any period of time.
The learned Presiding Officer, the Labour Court after hearing the learned Counsel for the parties by his order dated 12.1.2001 passed an award. The Labour Court, in its award, decided the issue No. 1 against AIDC observing that there was no document on records to show that AIDC transferred ESKPP to the IPAL at any period of time. When issue No. 2 was held to be otiose observing that though both the parties had proved the appointment of candidates by IPAL and AIDC, none of them came within the categories of those posts advertised, on issue No. 3 the Labour Court held that (1) it was not incumbent upon the AIDC to absorb members of the Appellant to any other project/industry and (2) when the ESKPP could not be run, it was incumbent upon AIDC to terminate the services of the members of the Appellant giving them all termination benefits according to relevant industrial and labour laws; and until then AIDC was obligated to give the members of the Appellant regular salaries. 7. The award was impugned by both the parties by two writ petitions as mentioned above challenging the legality and validity of each part of the award which was against them. 8. The learned Single Judge by the impugned judgment and order dismissed the W.P. (C) No. 3424/01 preferred by the Appellant observing as follows: As a matter of fact, the learned Advocate for the Petitioner did not press this writ application at all and did not advance any argument whatsoever and as such, the writ application shall stands dismissed. 9. On the other hand while allowing the W.P. (C) No. 1805/01 preferred by the AIDC, the learned Single Judge discussed various case laws relating to the scope of adjudication on the reference by the Labour Court in terms of Section 10(4) of the Act which provides that on a reference of an industrial dispute, a Labour Court or Tribunal or National Tribunal, as the case maybe, shall confine on those points specified and matters incidental thereto and ultimately quashed the part of the award of the issue No. 3 for the reasons as has already been noticed. 10. We have heard Mr. S.N. Sarma, learned Sr. counsel assisted by Mr. A. Sarma, learned Counsel appearing on behalf of the Appellant and Mr. P.C. Deka, learned Sr. counsel assisted by Mr. S.K. Medhi, learned Counsel representating AIDC.
10. We have heard Mr. S.N. Sarma, learned Sr. counsel assisted by Mr. A. Sarma, learned Counsel appearing on behalf of the Appellant and Mr. P.C. Deka, learned Sr. counsel assisted by Mr. S.K. Medhi, learned Counsel representating AIDC. We have also meticulously inspected the material available on records including the respective pleadings of the parties as well as the impugned judgment and order passed by the learned Single Judge and also the award passed by the Labour Court. 11. On close scrutiny of the materials aforementioned, it is seen that the learned single judge dismissed the writ petition filed by the Appellant recording that the learned Counsel for the Appellant neither press the petition nor did advance any argument whatsoever; meaning thereby that the Appellant had no grievance against the award of the Labour Court but the award itself, on the face of it, appears to be perverse inasmuch as the findings of the Labour Court basically based on no evidence though adduced by the parties. Even there is no whisper as regards the deposition of the witnesses adduced for or against issues under reference. That apart, in deciding issue No. 1 against AIDC, the Labour Court simply recorded that there was no documents on records to show that AIDC transferred ESKPP to IPAL at any period of time, losing sight of the other materials available on records including the Memorandum and Article of Association as well as the re-constitution of the Board of Directors of IPAL on 23.2.88 by Govt. of Assam. 12. Regarding issue No. 2, the Labour Court clearly indicated that though the management (AIDC) proved some appointment letters issued by IPAL and the Appellant proved many interview and appointment letters issued by the AIDC to the members of the Appellant, none of them came within the categories of the posts advertised i.e. 11 posts of officers so advertised by the AIDC as reflected in the award itself. That being so, the Labour Court failed to decide issue No. 2 in its proper perspective. More so, the finding in issue No. 3, as already noted, appears to be absurd and not tenable under the law. On the other hand, the impugned judgment also demonstrates perversity.
That being so, the Labour Court failed to decide issue No. 2 in its proper perspective. More so, the finding in issue No. 3, as already noted, appears to be absurd and not tenable under the law. On the other hand, the impugned judgment also demonstrates perversity. Issue No. 3 was quashed by the learned Single Judge holding that as there was a clear cut finding that the workmen were not the employees of the AIDC, the question of giving them benefit as done by the Labour Court did not arise. This Court does not see any such finding recorded either in the award of the Labour Court or in the impugned judgment. 13. The Memorandum and Articles of Association of both AIDC and EPAL as well as Certificate of Incorporation of IPAL would go to show that both are separate and independent company and having their independent Board of Directors. The Notification dated 22.2.88 by which the Board of Directors of IPAL was reconstituted proves that the Company has a distinct identity as a separate Company with its own Board of Directors. AIDC, being a nodal agency of Govt. of Assam, has acted only as a promotional organisation for promoting IPAL, since it was in the nascent stage at the relevant time and as such a promoter of the Company cannot be branded as the owner of the same. The word 'owner' has been defined in Section 3(1) of the Industries Act and the same may be quoted as follows: (1) "owner", in relation to an industrial undertaking, means the person, who, or the authority which, has the ultimate control over the affairs of the undertaking, and, where the said affairs are entrusted to a manager, managing director or managing agent, such, manager, managing director or managing agent shall be deemed to be the owner of the undertaking, The definition does not indicate that a promoter can also be called as owner. More so, as per Black's Law Dictionary (Sixth Edition), the promoter means 'one who promotes, urges on, encourages, incites, advances etc. One promoting a plan by which it is hoped to insure the success of a business, entertainment etc. venture. The person who, for themselves or others, take a preliminary steps to the funding or organisation of a corruption or other venture.
One promoting a plan by which it is hoped to insure the success of a business, entertainment etc. venture. The person who, for themselves or others, take a preliminary steps to the funding or organisation of a corruption or other venture. Those person who first associate themselves together for the purpose of organising the company, issuing its prospectus, procuring subscriptions to the stock, securing a charter etc. From an ordinary reading of the meaning of 'promoter', it can be well deduced that 'promoter' cannot be treated as owner. 14. In the advertisement which has been quoted in the award of the Labour Court, the posts advertised were (i) Controller of Finance and Accounts, (ii) Human Resource Development Manager, (iii) Material Manager, (iv) Senior Civil Engineer, (v) Civil Engineer, (vi) Electrical Engineer, (vii) Mechanical Engineer, (viii) Jr. Electrical Engineer (Construction), (ix) Jr. Mechanical Engineer (Construction), (x) Civil Supervisors and (xi) Supervisor (Expediting). Obviously none of those posts can be called as workmen under the Act. More so, the advertisement clearly specified that the applications were invited for personnel for the ESKPP of IPAL promoted by AIDC. Interestingly, the persons so appointed against those posts, not being the workmen as per the advertisement, had not raised any dispute. Rather the dispute was raised by IPAL which did not represent the persons so appointed as per the said advertisement. Accordingly, we are of the view that the persons who are not represented and who are not before the Court, cannot be held to be the employees appointed by the AIDC. Since the AIDC, in our considered opinion is not the owner of the ESKPP of IPAL, being a separate and independent Company, The members of the Appellant are not the employees of AIDC and cannot be saddled with the responsibilities of those employees. Accordingly, the Management of AIDC is also not liable for absorption or engagement of the employees of IPAL or any other promoted industries or to give them salaries regularly after the closure of the project. In the result, this appeal fails and stands dismissed. No costs. Appeal dismissed.