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Madhya Pradesh High Court · body

2005 DIGILAW 554 (MP)

Hope Textiles Ltd. v. Nemichand

2005-04-27

S.K.GANGELE

body2005
JUDGMENT S.K. Gangele, J. 1. The petitioner is a private limited company registered under the provisions of the Companies Act, filed this petition challenging the order of Industrial Court dated 7.12.2004 passed in C.A. No. 625/2004. By the aforesaid order the learned Chairman of the Industrial Court, partially allowed the appeal of the petitioner, other 42 eases have also been decided by the Court by this order. The petitioner has filed 43 petitions including this one against the common order passed by the Industrial Court with regard to each workman. All these petitions are being decided by this common order. 2. Earlier the petitioner-Company was known as Nandlal Bhandari Mills Limited. In the year of 1973 controlling shares of the Company were taken over by Potdar family, thereafter name of the Company has been changed to M/s. Hope Textile Limited. It had number of workers but due to financial constraints the Company declared lay off on 6.6.1986. Thereafter, it applied to the State Government, permission for lay off. The permission has been refused by the Government on 24.10.1986. Then, the petitioner filed a petition before Ibis Court, challenging the refusal of permission by the State Government. The petition was registered as M.P. 242/1987. The Division Bench of this Court vide order dated 23.7.1987 dismissed the petition of the Company by holding that the lay off declared by the Company was against the provisions of Industrial Disputes Act, Section 25-M and refusal to grant permission by the Government is proper. It filed a special leave petition before the Supreme Court which has also been dismissed. Since 6.6.1986 the Mill of the petitioner has not been working and the workers were idle. The representative-union of the workers i.e. Mill Mazdoor Sangh, filed an application on 28.12.1989 for grant of wages to the workers under Section 15 of the Payment of Wages Act before the Labour Court. The Court on 3.7.1990 passed an order for payment of wages to the workers of Rs. 1,59,77,400.77. The aforesaid order has been challenged by the petitioner, before the High Court in a petition which was registered as M.P. No. 7701/91. However, the petitioner Company withdrew the petition which was dismissed by the Court vide order dated 2-1-1995 as withdrawn. 3. The Court on 3.7.1990 passed an order for payment of wages to the workers of Rs. 1,59,77,400.77. The aforesaid order has been challenged by the petitioner, before the High Court in a petition which was registered as M.P. No. 7701/91. However, the petitioner Company withdrew the petition which was dismissed by the Court vide order dated 2-1-1995 as withdrawn. 3. In the meanwhile on 30.5.1994 the petitioner-Company entered into an agreement with the President of Indore Mill Mazdoor Sangh, the representative Union, with regard to payment of wages and other dues to the workers from the date of closure of the Mill i.e. 6.6.1986 and certain provision has been made for payment of some amount to the workers. Copy of the agreement has been filed as Annexure P/16-A along with the petition. It is clear from the aforesaid agreement that it had not been entered in a conciliation proceedings or a copy of the agreement was not sent to the Registrar, thereafter, another agreement on 10.10.2001 has been signed by the petitioner-Company and the President of the representative-Union, Mr. Vishnu Ustad with regard to payment of certain wages to the workers and it is also mentioned in the agreement that Union did not support the litigation with the Company and it wants restructuring of the Company. The aforesaid agreement was sent for registration to the Registrar and vide order dated 10.5.2002 the Registrar held that the agreement is just and proper and registered it as per the provisions of the M.P.I.R. Act. It is noteworthy that on 25.10.200t the President of the Union Mr. Vishnu Ustad sent a letter to the Registrar that the agreement dated 10.10.2001 be not registered because the agreement is defective and the affected workers were not consulted. The workers had also filed their objections, copy of the letter has been filed as Annexure-R/3 with the return of the respondent. Subsequently on 2.4.2003 the Union submitted a notice with regard to termination of the agreement dated 10.10.2001. The Registrar as per Rule 88 framed under Section 95(5) of the M.P.I.R. Act cancelled the agreement and made an endorsement to the aforesaid effect in the register. 4. Subsequently on 2.4.2003 the Union submitted a notice with regard to termination of the agreement dated 10.10.2001. The Registrar as per Rule 88 framed under Section 95(5) of the M.P.I.R. Act cancelled the agreement and made an endorsement to the aforesaid effect in the register. 4. When the workers including the respondent did not get their wages inspite of the order of the Authority of Payment of Wages Act, the respondent and other workers filed an application before the Labour Court on 30.5.2002 under Sections 31, 34, 61 and 62 of the M.P.I.R. Act, 1962 challenging the illegal change in their service conditions and also payment of balance amount of wages, that case was registered as Case No. 204 of 2002. The petitioner-Company resisted the claim mentioning that the application is not maintainable because the worker is not a workman thereafter on 19.9.2003 on request from the Counsel of the respondent that because in another case the decision of the Court was pronounced, the aforesaid case was withdrawn. 5. The respondent-workman and other 42 workers filed another application/applications on 31.7.2002 before the Labour Court challenging their termination of service as illegal and reinstatement. On the aforesaid application the Labour Court registered a Case No. 330/02 of M.P.I.R. The petitioner resisted the claim mentioning that the worker had already taken the benefit as per the agreement dated 2.7.2002, hence they cannot challenge the order dated 30.3.2002. It has further been contended that the workers had already retired after attaining the age of superannuation and the dispute is not maintainable because there is no cause of action. On 30.3.2002 the petitioner also passed an order with regard to retirement of the respondent worker with effect from 1st January, 1996 because he had attained the age of superannuation i.e. 58 years. Similar orders have been passed with regard to other workers. 6. Before the Labour Court the respondent-worker had taken an objection that the matter can be decided without taking evidence that whether an order of retirement can be passed with retrospective effect. That objection has been rejected by the Labour Court vide order dated 11.2.2003. Thereafter, the respondent filed an appeal before the Industrial Court which was registered as Appeal No. 90/2003 and the Industrial Court vide order dated 8.5.2003 directed the Labour Court to pass order on the plea of the respondent-workman that retirement order cannot be passed with retrospective effect. That objection has been rejected by the Labour Court vide order dated 11.2.2003. Thereafter, the respondent filed an appeal before the Industrial Court which was registered as Appeal No. 90/2003 and the Industrial Court vide order dated 8.5.2003 directed the Labour Court to pass order on the plea of the respondent-workman that retirement order cannot be passed with retrospective effect. Then vide older I dated 29.8.2003 the Labour Court has held that the respondent-worker is entitled to remain in service from the date of issuance the order of retirement i.e. 30.3.2002 and consequently he is entitled for wages and other allowances upto that period if he was in continuous service. Against the aforesaid order the petitioner filed an appeal before the Industrial Court which was registered as Appeal No. 1435/03 and vide order dated 31.3.2004 the Industrial Court remanded the case back to the Labour Court with the observations that it had not decided all the objections raised by the petitioner. 7. The petitioner led detailed evidence before the Labour Court. The respondents worker has also deposed in support of his claim. After considering oral and documentary evidence and the legal issues raised by both the parties the Labour Court vide order dated 3.9.2004 held that the lay off declared by the management was illegal as held by Hon'ble High Court hence the respondent-worker deemed to be continued in service upto the date of passing of the order of retirement i.e. 30-3-2002 and lie is entitled wages upto the aforesaid period. Similar orders have been passed in the cases of other workers. 8. Being aggrieved the respondent and petitioner both filed appeals before the Industrial Court. The learned Industrial Court dismissed the appeal filed by the respondent and partly allowed the appeal of the petitioner by holding that the respondent-workman is entitled to be continued in service and receive wages upto the date of his superannuation which is 1st March, 1996 in the case of the respondent and different dates with regard to other workers in the connected petitions. It has been further held by the learned Industrial Court that the workman-respondent is entitled to receive all the wages and other retiral benefits payable to him as per law upto the age of his superannuation and if any extra amount was paid by the petitioner to the respondent as ex-gratia payment, it may be deducted. 9. It has been further held by the learned Industrial Court that the workman-respondent is entitled to receive all the wages and other retiral benefits payable to him as per law upto the age of his superannuation and if any extra amount was paid by the petitioner to the respondent as ex-gratia payment, it may be deducted. 9. The petitioner has challenged the aforesaid order of the Tribunal before this Court. 10. Learned Counsel for the petitioner has submitted that the claim putforth by the respondent-workman before the Labour Court was not maintainable on the following grounds: (1) That the representative Union had entered into an agreement with the petitioner-Management with regard to the entitlement of wages after the lay off and the aforesaid agreement is still in force because no further agreement or settlement has been entered into between the Union and the Management. (2) That the respondent-worker received benefits in pursuance to the agreement and there is waiver on his behalf. (3) That appropriate Government has already referred a dispute for adjudication as a reference with regard to wages and lay off to the worker and the case is pending as Reference Case No. 18/MPIR 2003 before the Industrial Court. Earlier also the respondent and the other workers filed the application on similar relief which has been withdrawn and the relief which was claimed by the respondent was with regard to discontinuation of service and payment of wages by the Court cannot be granted in favour of the respondents when there was no relief claimed by him. He further submitted that the Industrial Court did not consider the legal position with regard to settlement with the representative Union on the matter of payment of wages to the workers. 11. In support of his contention the L/c (or the petitioner relied on the following decisions: 1981 MPLJ 88 , and 2001 LIC 939 . 12. Contrary to this L/c for the respondent and the other workmen submitted that the order of the Industrial Court is as per law. The lay off declared by the petitioner was illegal and the same has been upheld by the Division Bench of this Court, hence the workers were deemed to be continue in service and they are entitled to receive the wages upto the date of their superannuation. The lay off declared by the petitioner was illegal and the same has been upheld by the Division Bench of this Court, hence the workers were deemed to be continue in service and they are entitled to receive the wages upto the date of their superannuation. There was no valid agreement with the representative Union and the petitioner as per the provisions of the M.P.I.R. Act. The agreement has also been terminated by the representative-Union and in the alternative if this Court find that the agreement was valid one, the respondent/worker cannot be said to be a party to the aforesaid agreement or settlement because he was retired on the date of agreement or settlement and the Union had no right to enter into a settlement or agreement with regard to the statutory cues payable to the workman-respondent under the statutory provisions of law. He has further submitted that the agreement was an eye wash. The petitioner anyhow wanted to claim benefits under the B.I.F.R. and for the aforesaid purpose the aforesaid agreement was signed. He relied on the following case laws in support of his contentions: ILR1992 795, ILR1996 724, ILR2005 305, ILR1992 418, 2004 SCC (L and S) 751, 2005(1) LLJ 323 and 2001 LLR Summary 6. 13. From the aforesaid contentions and factual position it is clear that the lay off declared by the petitioner with effect from 6.6.1986 was unilaterally and illegal as held by the Division Bench of this Court vide order dated 1.7.1992 passed in W.P. No. 242/87. The aforesaid judgment has become filial because the petitioner withdrawn S.L.P. against the aforesaid judgment. In consequence thereof the respondent-workman is deemed to be continued in service upto the date of his superannuation and he is entitled to receive full backwages and other retiral benefits as per law. 14. Next question is with regard to effect of agreement entered by the representative-Union and the petitioner about the wages of the workers. The first agreement to the aforesaid effect is dated 30.5.1994 which has been signed by the President of Mill Mazdoor Sangh and the Executive Director of the petitioner. It is clear from the aforesaid agreement that it has not been entered into in the presence of Conciliation Officer. Neither it was sent for registration to the Registrar. The second agreement dated 10.10.2001 was sent for registration to the Registrar. It is clear from the aforesaid agreement that it has not been entered into in the presence of Conciliation Officer. Neither it was sent for registration to the Registrar. The second agreement dated 10.10.2001 was sent for registration to the Registrar. Immediately, thereafter on 25.10.2001 the President of the Union submitted a letter to the Registrar not to register the agreement because it was defective and consent of the workers was not obtained. The workers also objected about the aforesaid agreement. However, the Registrar registered it but subsequently cancelled it on letter of withdrawal by the Union. 15. It is an admitted position that the petitioner had attained the age of superannuation in the year 1996 much before the second agreement which was said to be signed on 10.10.2001. Section 2(29) of M.P.I.R. Act defines settlement which is as under: (29) "settlement" means a settlement arrive at during the course of conciliation proceedings under this Act. Section 97 of M.P.I.R. prescribes the conditions when agreement binds the employees which is as under: 97. Agreements, etc. on whom binding.- (1) A registered agreement or a settlement or a submission shall be binding upon all persons who are parties thereto: XX XX XX (2) In cases in which a representative-Union is a party to a registered agreement or a settlement or submission the State Government may, after giving the parties affected an opportunity of being heard, by notification, direct that such agreement, settlement or submission shall be binding upon such other employers and employees in such industry in that local area as may be specified in the notification. Provided that before giving a direction under this section, the State Government may, in such cases as it deems, fit, make a reference to the Industrial Court for its opinion. (3) A registered agreement entered into by the representatives of the majority of the employees affected or deemed to be affected under Section 32 by a change shall bind all the employees so affected or deemed to be affected. 16. It is clear from the aforesaid provisions that the settlement binds only if it was entered into the presence of Conciliation Officer and the agreement which has been registered with the Registrar has a binding effect if it is entered into between the representative-Union and the management. 16. It is clear from the aforesaid provisions that the settlement binds only if it was entered into the presence of Conciliation Officer and the agreement which has been registered with the Registrar has a binding effect if it is entered into between the representative-Union and the management. In the aforesaid background it is clear that upto 2001 there was no such agreement because the first agreement of the year 1994 was not sent for registration nor it was signed before the Conciliation Officer. The object of presence of Conciliation Officer has been discussed by the Apex Court in General Manager, Security Paper Mill, Hoshangabad v. R.S. Sharma and Ors. 1986 (52) FLR 358 (SC), as under: If a settlement of the dispute or of any of the matters in dispute is arrived at in the course of the conciliation proceedings the Conciliation Officer shall send a report thereof to the appropriate Government or an officer authorised in that behalf by the appropriate Government together with a Memorandum of Settlement signed by the parties. Even though a Conciliation Officer is not competent to adjudicate upon the disputes between the management and its workmen he is expected to assist them to arrive at a fair and just settlement. He has to play the role of an adviser and friend of both the parties and should see that neither party takes undue advantage of the situation. Any settlement arrived at should be a just and fair one. It is on account of this special feature of the settlement Sub-section (3) of Section 18 provides that a settlement arrived at in the course of conciliation proceedings under that Act shall he binding on (i) all parties to the Industrial dispute, (ii) where a party referred to in Clause (i) is an employer, his heirs successors, or assigns in respect of the establishment to which the dispute relates, and (iii) where a party referred to in Clause (i) is comprised of workmen, all persons who were employed in the establishment or part of the establishment as the case may be to which the dispute relates on the date of the dispute and all persons who subsequently become employed in that establishment or part. Law thus attaches importance and sanctity to a settlement arrived at in the Courts of a conciliation proceeding since it carries a presumption that it is just and fair and makes it binding on all the parties as well as the other workmen in the establishment of the part of it to which it relates. 17. With regard to second agreement it is clear that there was objection of the Representative Union and the workers soon after objected the agreement in spite of that the Registrar registered it but subsequently it has also been cancelled, against that the petitioner filed an appeal which has also been dismissed by the Industrial Court. Thereafter, the petitioner has filed a petition before this Court against the order of the Industrial Court which has also been decided by this Court, W.P. No. 113/04 and the petition has also been dismissed. In the aforesaid background it can safely be said there was no agreement at all. Apart from this it is clear from the aforesaid fact that the aforesaid agreement was entered into by the Union after retirement of the workers and the subject is their dues which are payable to them after their retirement. A representative Union cannot be held to be entitled to enter into such a agreement which would affect the statutory right. of the workers including the gratuity, backwages and bonus. 18. The Apex Court in the case of Oswal Agro Ltd. v. Oswat Agro Furane Workers Union 2005 (104) FLR 992 (SC) : 2004 (27) AIC 1, has as under: It is trite that having regard to the maxim "exturpi causa non oritur actio" an agreement which opposes public policy as laid down in terms of Sections 25-N and 25-O of the Act would be void and of no effect. The Parliament has acknowledged the governing factors of such public policy. Furthermore, the imperative character of the statutory requirements would also be borne out from the fact that in terms of Sub-section (7) of Section 25-N and Sub-section (6) of Section 25-O, a legal fiction is now well known. See East End Dwellings Co. Ltd. v. Finsbury Borough Council 1 (1951) 2 All ER 587; Om Hemrajani v. State of U.P. and Anr. (2005) 1 SCC 617 , and Maruti Udyog Ltd. v. Ram Lal and Ors. 2005 (104) FLR 820 (SC). 19. See East End Dwellings Co. Ltd. v. Finsbury Borough Council 1 (1951) 2 All ER 587; Om Hemrajani v. State of U.P. and Anr. (2005) 1 SCC 617 , and Maruti Udyog Ltd. v. Ram Lal and Ors. 2005 (104) FLR 820 (SC). 19. The learned Author W. Friedmann in his book Legal Theory, V Edition cautioned giving such a wide power to the representative-Unions affecting statutory rights of persons (Chapter 31 Printed, page 403): The threat to personal freedom becomes grave when a union in this position excludes any group or individuals affected by the contract from membership (e.g. Negros). Some States have enacted statutory guarantees against such discrimination. Courts have granted injunctions. A democratic evaluation certainly demands that group monopoly shall not deprive an individual of the right to work. It cannot allow a combination of the monopoly of contracting on behalf of a group with the power to prevent individuals from participating in contracts by which they are legally affected. The main threat to this freedom comes at present from the almost unchecked power of the trade unions to control the admission to, and expulsion from, membership with virtually no legal control. 20. With regard waiver of his right by the workers or the respondent it is clear that they have never entered into any agreement with the petitioner contrary they have agitated their claim before various Forums in such a circumstances the principle of waiver of statutory right on their behalf cannot he applied. 21. Another point of grant of relief by the Industrial Court for payment of wages to the respondent-workman upto the date of his superannuation it is clear that the workman filed an application before the Labour Court that his termination of service is illegal in pursuance of the order of the petitioner passed on 30.3.2002 with regard to his superannuation with effect from 1st January, 1996 hence in such a circumstance the Industrial Court and Labour Court has rightly held the worker-respondent is entitled to get wages as he was in continuous service upto the age of superannuation. The Hon'ble S.C. in the case of Jamshed Hormusji Wadia v. Board of Trustees, Port of Mumbai and Anr. The Hon'ble S.C. in the case of Jamshed Hormusji Wadia v. Board of Trustees, Port of Mumbai and Anr. 2004(3) SCC 214 : 2004 (15) AIC 402 (SC), has held as under: Experience shows that such self-imposed restrictions placed as fetters on its own discretionary power under Article 136 have not hindered the Court from leaping into resolution of individual controversies once it has been brought to its notice that the case has failed to deliver substantial justice or has perpetuated grave injustice to parties or is one which shocks the conscience of the Court or suffers on account of disregard to the form of legal process or with violation of the principles of natural justice. Often such are the cases where the judgment or decision of cause or matter brought to its notice has failed to receive the needed care, attention and approach at the hands of the Tribunal or Court below, or even the High Court at times, and the conscience of this Court pricks or its heart bleeds for imparting justice or undoing injustice. This Court has never done and would never do injustice nor allow injustice being perpetuated just for the sake of upholding technicalities. 22. On the basis of above discussion of law and facts and circumstances of the case, I do not find any merit in this petition. 23. Before parting with the case, I have to observe that the facts of the case speaks a sorry state of affairs. The petitioner illegally declared the lay off without permission of the appropriate Government in the year of 1986 since then the workers have not been paid their dues and their wages even after their retirement, no amount of gratuity has been paid except some ex gratia payment. After the delay of near about 19 years the workers are still awaiting to receive their dues, their all hopes and aspirations of life have been frustrated. The petition is hereby dismissed with a cost of Rs. 3000/-.