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2005 DIGILAW 573 (KER)

K. Shahul Hameed v. Premier Automobiles Ltd

2005-08-29

RAJEEV GUPTA, S.SIRI JAGAN

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Judgment :- Siri Jagan, J. The subject matter of this writ appeal is the award of the Industrial Tribunal, Alappuzha in I.D.No.107 of 1987 which was set aside by the learned Single Judge, by the judgment impugned in this writ appeal, upholding the retrenchment of the appellant-workman by the 1st respondent-management, pursuant to closure of the establishment. The brief facts necessary for the disposal of the writ appeal are as follows. 2. The 1st respondent-Management is a Company engaged in the manufacture of automobiles having its manufacturing unit at Bombay. Some time in 1971-72, the Company started a Delivery Depot at Cochin with six employees. The appellant-workman was one of those employees. In 1986, the management decided to close down the Delivery Depot at Cochin and, by Ext.P2 order dated 31-5-1986, terminated the services of the appellant on closure of the establishment. The appellant-workman accepted the termination and received retrenchment compensation and other benefits due to him including provident fund and gratuity. The same was received on 4-2-1987. More than one year and 8 months thereafter, on 12-10-1987, the appellant issued Ext.P6 notice to the 1st respondent-management stating that the appellant was illegally retrenched from employment, demanding reinstatement with backwages. It was stated therein that the Marketing Executive of the sales depot of the management had given certain promises to the workmen, which has not been implemented. It appears that in September 1987 or thereafter, the management-Company engaged the services of M/s. T.V. Sundaram (P) Ltd., for handling and managing the Kerala Sales Depot of the Management-company at Calicut. In the circumstances, the workman raised an industrial dispute challenging his termination of service as illegal retrenchment and claiming employment in the Calicut Depot of the Management-Company. The said dispute was referred for adjudication to the Industrial Tribunal, Alappuzha along with another similar dispute raised by another employee of the erstwhile Cochin Depot of the management-Company. The Tribunal adjudicated both disputes together and, by a common award, which is Ext.P19 in the original petition, held that the retrenchment of the workman is in violation of Section 25N of the Industrial Disputes Act (for short the ‘I.D. Act’) and directing that the workmen are entitled to a preferential treatment for appointment as envisaged in Section 25H of the I.D. Act, although, in the relief portion, the tribunal does not mention as to where the preferential appointment should be given. However, from the discussion in the earlier part of the award, it should be presumed that the same is at the Calicut depot of the management-Company. 3. Against the award, the management-Company filed O.P.No.14136/1993. A learned Single Judge of this Court set aside the award on three grounds, viz. (1) On account of delay and laches in the matter of raising the industrial dispute; (2) Section 25B is applicable only to an industrial establishment and the Cochin depot of the management-Company is not an industrial establishment as defined in Section 25-L of the I.D. Act and, therefore, Section 25-N of the I.D. Act is not applicable to the establishment at Cochin and (3) in view of rule 78 of the Kerala Industrial dispute rules, even assuming that the workman is entitled to preferential appointment under Section 25H, such obligation on the part of the employer should be limited to one year from the date of retrenchment. In the original petition, the appellant-workman also raised a contention that he is entitled to wages under section 17-B of the I.D. Act till the disposal of the original petition, which was also negatived by the learned Single Judge on the grounds that there was no direction for reinstatement which is a condition precedent for claiming Section 17-B wages and that the petitioner’s age was 67 and his retirement age was 60. On these findings, the learned Single judge allowed the original petition. The said judgment is under challenge in this writ appeal. 4. We have heard arguments of counsel. Counsel for the appellant strenuously argued that the findings of the learned Single judge is totally unsustainable. He would submit that the finding that since there was inordinate delay in raising the dispute, the reference itself is unsustainable, is against the facts of the case. According to him, his termination from service was on 31-5-1986 and he raised the dispute by issuing a notice to the management on 12-10-1987, a little over one year after his termination from service, which cannot be considered to be an inordinate delay to deny the benefit of adjudication to the appellant. According to him, going by the Supreme Court decisions on this subject, even a delay of 10 years may not be fatal to the adjudication itself. According to him, going by the Supreme Court decisions on this subject, even a delay of 10 years may not be fatal to the adjudication itself. In support of this contention, he relies on the decisions of the Supreme Court in Essen Deinki v. Rajiv Kumar, reported in (2002) 8 SCC 400, Management of M/s. Indian Iron & Steel Co. Ltd. v. Prahlad Singh, reported in AIR 2001 SC 69 and Management of Madurantakam Co-operative Sugar Mills Ltd., v. S. Viswnathan, reported in (2005 3 SCC 193. He further submits that the finding of the learned Single Judge that Sections 25-N and 25-O are not applicable to the establishment in so far as the Cochin Depot of the management does not answer the definition of an industrial establishment in Section 25-L of the I.D. Act, is patently unsustainable. According to him, as held by the Tribunal itself, the Cochin Depot is an integral part of the Bombay establishment of the management-company and as such, for deciding the question as to whether the Cochin Depot is an industrial establishment, the Bombay unit and the Cochin unit should be considered as one industrial establishment on which consideration, Chapter V-B of the I.D. Act would become applicable to such industrial establishment. 5. On the question of applicability of rule 78 of the Industrial Disputes Rules, in respect of the claim of the workman under Section 25-H, he would submit that in so far as such a limitation of time is available in the Section itself, such a limitation cannot be applied to deny relief to the appellant-workman. Regarding the question of payment of wages under Section 17-B of the I.D. Act, counsel would argue that the right under Section 17-B is a valuable right available to the workman which cannot be denied by giving a restricted meaning to the word “reinstatement” occurring in Section 17-B. 6. We have considered the arguments of counsel in detail. Even before going into the arguments of counsel regarding the findings of the learned Single Judge, we would point out a fatal flaw in the case of the appellant-workman hitherto not specifically considered. Admittedly, the appellant was retrenched from service on 31-5-1986 on account of the closure of the sales depot of the management-Company at Cochin. He has no case that he had raised any dispute regarding the validity of the closure as such. Admittedly, the appellant was retrenched from service on 31-5-1986 on account of the closure of the sales depot of the management-Company at Cochin. He has no case that he had raised any dispute regarding the validity of the closure as such. On the other hand, he admits the closure as a question of fact and as an irreversible process, and, probably, that is why the appellant-workman himself accepted the retrenchment compensation, notice pay, provident fund and gratuity paid to him without any demur. In fact, for the first time, he questioned that the retrenchment itself was more than one year and five months after the termination of his service. Going by the pleadings, even at that time, the case of the appellant-workman was that at the time of retrenchment, he was given an assurance by the Marketing Executive (Sales) at Cochin Sri. M.P. Shimpi, that as and when the Company starts another depot, he would be accommodated there as a workman, which, of course, is denied by the Management. In Ext.P2 letter of termination of service issued to the appellant-workman on 31-5-1986, it is specifically stated that the management has decided to close their Kerala sales depot at Mamangalam, and, therefore, the services of the workmen are no longer required, which is the reason for the termination of service. Along with the said letter itself, the retrenchment compensation and one month’s wages in lieu of notice and other dues payable to him were paid by two cheques. The details of computation of the amounts were also annexed to the said letter. In that letter, it is seen that the appellant-workman himself has made an endorsement, “the contents of this letter are acceptable to me and I have received the above-mentioned two cheques”, below which, he has put his signature. Further by Ext.P3, the appellant-workman himself put in an application before the trustees of the Premier Automobile Limited Employees’ Gratuity Fund for payment of gratuity for which he is entitled under the payments of Gratuity Act. The gratuity, pursuant to the said application as also the provident fund amount payable to him were paid as per two cheques for warded to the appellant under cover of Ext.P4 letter, which is also seen receipted by him in the said letter itself. The gratuity, pursuant to the said application as also the provident fund amount payable to him were paid as per two cheques for warded to the appellant under cover of Ext.P4 letter, which is also seen receipted by him in the said letter itself. In Ext.P6 notice issued by the appellant-workman through his advocate also, there is no mention that the closure was illegal, although, in that for the first time, he makes a claim that he was illegally and wrongfully retrenched from service. A reading of Ext.P7 would give the impression that his primary claim was regarding the payment of gratuity as per the Payment of Gratuity Act, 1972, minimum wages and medical reimbursement. So also, in Ext.P7 notice, the appellant-workmen was harping on the various promises given by the Marketing Executive Sri. M.P. Shimpi which would also give the impression that his complaint was regarding the non-implementation of the promises so given and not about the validity of the closure as such or the retrenchment. Ext.P10 complaint filed before the Deputy Labour officer, Ernakulam also there was no mention whatsoever that the closure of the Cochin depot was in any way illegal or unsustainable. Although he raises a dispute that his retrenchment is illegal, he does not state as to how the retrenchment is illegal. As such, the issue involved in the dispute should be viewed in the above backdrop, since it is on the basis of the above documents that the ultimately, the Government of Kerala referred the dispute for adjudication by the Industrial Tribunal by Ext.P14 reference order. 7. From Ext.P.14 reference order, three issues are seen referred for adjudication. They are: “(1) Whether retrenchment of Sri. K. Shahul Hameed is justifiable or not? (2) Whether Sri. K. Shahul Hameed is eligible for re-employment in Calicut Branch? And (3) If the retrenchment is not in accordance with law, what relief he is entitled to get?” It is significant to note here that the Government also did not find it necessary to refer the issue regarding the validity of the closure as such as an issue for adjudication probably because of the fact that such an issue was never raised by the appellant-workman or his Union at any time. 8. 8. In fact, although there was reference to Section 25-O in the award of the Industrial Tribunal in some places, ultimately, the Tribunal also did not come to any finding that the closure as such is illegal or violative of Section 25-O. On the other hand, we find that there is a specific finding in paragraph 7 of Ext.P19 award of the Tribunal as follow: “It is a fact that sales office at Mamangalam, Cochin was closed for ever and the workmen became unemployed. They are staking claim for re-employment by making an alternative plea to the effect that even assuming that retrenchment in their case were on valid grounds, while opening a new unit of the same nature, it was obligatory on the management to give them offer of employment.” Ultimately, the Tribunal only found that the retrenchment is in violative of Section 25-N of the Industrial Disputes Act. Even then, the Tribunal did not find it necessary to direct reinstatement of the workman with or without backwages. On the other hand, the relief granted to the workman was that he is entitled to preferential treatment for appointment as envisaged in Section 25-H of the I.D. Act. This would also give an indication that the Tribunal also did not find it necessary or legally plausible to find that the closure as such is illegal or violative of Section 25-O or any other provisions of the I.D. Act. 9. Therefore, it follows that there is no finding that the closure is illegal or violative of the I.D. Act. If the closure is not illegal, as a corollary, the retrenchment of the appellate-workman consequent to such closure also cannot be held to be invalid. In view of our above finding alone, the appeal is liable to be dismissed. However, we shall further deal with the other contentions of the appellant-workman against the findings entered into by the learned Single Judge also. 10. Of course, going by the facts revealed in the case, the delay in raising the industrial dispute itself may not be fatal to the case of the appellant-workman. However, this delay should be viewed in the backdrop which we have stated first regarding the closure itself. 10. Of course, going by the facts revealed in the case, the delay in raising the industrial dispute itself may not be fatal to the case of the appellant-workman. However, this delay should be viewed in the backdrop which we have stated first regarding the closure itself. At the time when the appellant-workman was retrenched from service on 31-5-1986, the appellant also did not find any illegality in the closure itself and he readily and willingly accepted the closure and the consequent retrenchment. He also voluntarily received without any demur or protest the retrenchment compensation, notice pay, provident fund and gratuity which are the benefits due to a workman retrenched from service on closure of an establishment. Viewing that way, the delay will certainly point to the fact that the contention that the retrenchment was illegal, was only an afterthought which would certainly go against the case of the workman. 11. The next question is as to whether the finding of the learned Single Judge regarding the applicability of Chapter V-B of the Industrial Disputes Act closure of the Cochin Depot of the Management. Chapter V-B is applicable only to industrial establishments as defined in Section 25-L. If the Cochin Depot itself is taken as a separate unit of the management-Company, then, certainly, Chapter V-B and consequently Section 25-O will not become applicable to the said unit. Chapter V-B is applicable only to industrial establishments as defined in Section 25-L. If the Cochin Depot itself is taken as a separate unit of the management-Company, then, certainly, Chapter V-B and consequently Section 25-O will not become applicable to the said unit. In this connection, it may be noted that the term “industrial establishment” is defined under Section 2(ka) of the Industrial Disputes Act also, which reads as follows: “2(ka) “Industrial establishment or undertaking” means an establishment or undertaking in which any industry is carried on: Provided that where several activities are carried on in an establishment or undertaking and any one or some of such activities is or are an industry or industries, then,- (a) if any unit of such establishment or undertaking carrying in any activity, being an industry, is severable from the other unit or units of such establishment or undertaking, such unit shall be deemed to be a separate industrial establishment or undertaking: (b) if the predominant activity or each of the predominant activities carried on in such establishment or undertaking or any unit thereof is an industry and the other activity or each of the other activities carried on in such establishment or undertaking or unit thereof is not severable from and is, for the purpose of carrying on, or aiding the carrying on of, such predominant activity or activities, the entire establishment or undertaking or, as the case may be, unit thereof shall be deemed to be an industrial establishment or undertaking.” Going by the proviso to the said definition, it is clear that if the Cochin Depot of the management-Company can be regarded as severable unit from the other unit or units, it shall be deemed to be a separate industrial establishment or undertaking. Admittedly, the Cochin Depot of the Company is a sales depot and no manufacturing activity of any kind is going on in that unit. The manufacturing unit is at Kurla in Bombay. The Cochin Depot is separately registered under the Kerala Shops and Commercial Establishment Act. One is a factory and the other a shop. The staff of the two units are separate and wages are paid separately. The appellant-workman has also not adduced in any evidence to show that there is any functional interdependence or integrality between the manufacturing unit at Bombay and the sales depot at Cochin. One is a factory and the other a shop. The staff of the two units are separate and wages are paid separately. The appellant-workman has also not adduced in any evidence to show that there is any functional interdependence or integrality between the manufacturing unit at Bombay and the sales depot at Cochin. On the other hand, the evidence available would suggest that the management-Company has treated the Cochin Depot as a separate unit. From the very fact when it found that the unit was not viable, it readily closed down without affecting its business. There is no evidence also to show that the employees of the Cochin Depot was transferable to any other unit nor that they were considered as a part of the manufacturing unit of the Company at Bombay. In view of these facts, we are of opinion that the first proviso is applicable to the Cochin Depot and the Cochin Depot can be held to be a separate industrial establishment for the purpose of Chapter V-A of the Industrial Disputes Act. On that reasoning, the finding of the learned Single Judge that the Cochin Depot is not an industrial establishment as defined in Section 25-L and therefore the provisions of Chapter V-B, especially Section 25-O is not applicable to the Cochin Depot of the Management-Company and, therefore, the closure cannot also be regarded as invalid, is perfectly justified. We are fortified in our view by the decisions of the Apex Court in Workmen, Straw Board Manufacturing Co. v. M/s. Straw Board Manufacturing Co. v. 1974 1 LLJ 499, Workmen of Indian Leaf Tobacco Development Company Ltd., Guntur, v. Indian Leaf Tobacco Development Company Ltd., 1970, 1 LLJ 343 and Management of Hindustan Steel v. The workmen and others, 1973 LAB I.C. 461. It goes without saying that for the very reason, the finding that retrenchment of the workman is violative of Section 25-N also is unsustainable. 12. On the question of applicability of Section 25-H also, we fine that there is no merit in the contention of the appellant. It goes without saying that for the very reason, the finding that retrenchment of the workman is violative of Section 25-N also is unsustainable. 12. On the question of applicability of Section 25-H also, we fine that there is no merit in the contention of the appellant. The fact that under Rule 78 of the Kerala Industrial Disputes Rules, there is a specific limitation of one year in respect of employers’ liability to issue notice of vacancies to retrenched workmen under Section 25-H and that the appellant has not challenged the validity of the said Rule, would itself be sufficient to repel the contentions of the appellant. In any event, going by the letter addressed to M/s. Sundaram (P) Ltd., quoted in Ext.P19 award would itself show that in the Calicut Depot, the management-company had not employed any workmen of their own. In fact, clause (b) there of specifically starts with the words “you through your staff will arrange to receive the vehicles on our behalf at the stockyard and will keep correct account of the vehicles received and delivered together with relevant documents in support thereof, in accordance with our directions.” This would go to show conclusively that the management-company did not employ any workmen of their own at the Calicut Depot and that is another reason for negativing the claim of the workman under Section 25-H for employment at the Calicut Depot even assuming his other contentions are correct. In the above circumstances, we have no hesitation to hold that there is absolutely no merit in any of the contentions of the appellant and the appellant and the appeal deserves to be dismissed. 13. Regarding the claim for wages under Section 17-B of the I.D. Act, it is advantageous to extract the said provision here: “17-B. payment of full wages to workman pending proceedings in higher courts:- where in any case. Labour Court. 13. Regarding the claim for wages under Section 17-B of the I.D. Act, it is advantageous to extract the said provision here: “17-B. payment of full wages to workman pending proceedings in higher courts:- where in any case. Labour Court. Tribunal or National Tribunal by its award directs reinstatement of any against such award in a High Court or the Supreme Court, the employer shall be liable to pay such workman, during the period of pendency of such proceedings in the High court or the Supreme Court, full wages last drawn by him, inclusive of any rule if the workman had not been employed in any establishment during such period and an affidavit by such workman had been filed to that effect in such Court: Provided that where it is proved to the satisfaction of the High Court or the Supreme Court that such workman had been employed and had been receiving adequate remuneration during any such period or part thereof, the Court shall order that no wages shall be payable under this section for such period or part, as the case may be.” This would show that the said Section will become applicable only when the Industrial Tribunal or Labour Court directs reinstatement of the workman. It is not disputed that the Industrial Tribunal had not directed reinstatement of the workman with or without backwages. What has been directed is only fresh employment. We do not think that such a direction would come within the meaning of the word “reinstatement” used in Section 17-B. Further, going by the appointment order of the appellant himself, it is clear that as per the service conditions applicable to him, he was to retire from service at the age of 60. At the time of filing of the petition under Section 17-B of the Industrial Disputes Act, admittedly, the petitioner had passed the age of 60. For that reason also the appellant cannot claim wages as applicable to a reinstated workman since on that date, even if the award was implemented, he would not have been in service and, therefore, there was no point in directing payment of wages under Section 17-B. Therefore, there is no merit in the contentions of the appellant claiming wages under Sec. 17-B of the I.D. Act. For all the foregoing reasons, we find no merit in this appeal and the same is dismissed, but, without any order as to costs.