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2009 DIGILAW 3975 (MAD)

Management Of Manali Petro Chemicals Ltd. v. Joint Commissioner Of Labour, (Authority Under Industrial Employment (Standing Orders) Act, 1946) And Manali Petro Chemicals Ltd. , Technical Employees Union

2009-09-30

V.DHANAPALAN

body2009
ORDER : V. Dhanapalan, J. This writ petition is filed challenging the order dated 23.03.2005 passed by the 1st respondent. 2. Brief facts leading to the filing of this case are set out as under: (i) M/s. UB Petro Products Limited, a factory registered under the Factories Act, commenced commercial production in the year 1989. It put up a Unit at Sathangadu Village near Manali for the manufacture of Propylene Oxide, Propylene Glycol and Polyol. It was an industrial establishment employing more than 50 workmen and it submitted draft standing orders for certification under the provisions of the Industrial Employment (Standing Orders) Act. On 22.07.1994, the Certifying Officer, the 1st respondent herein certified the Standing Orders. The said Company had no other establishment. In October 1995, Southern Petro-Chemical Industries Corporation Limited acquired the controlling interest in the said Company and renamed the Company as SPIC Organics Limited. In April 2000, SPIC Organics Limited got merged with the petitioner company and the factory is called as Plant-II of the petitioner Company. (ii) During those years, the Standing Orders certified on 22.07.1994, when the Plant was under the control of the UB Petro Products Limited, governed the conditions of employment of the workmen of Plant-II. However, the Technical Employees' Union of Manali Petrochemical Limited, the 2nd respondent herein complained to the 1st respondent that there are no Certified Standing Orders for Plant II and that the petitioner should be directed to submit draft standing orders for certification. By a letter dated 14.07.2004, the 1st respondent informed the petitioner that by the proceedings dated 22.07.1994, Standing Orders were certified for the establishment, UB Petro Products Ltd., that the name of the establishment has been changed as Manali Petrochemical Limited and whether the Certified Standing Orders were altered in the name of the petitioner. (iii) Pursuant there to, on 24.09.2004, the petitioner sent a reply to the 1st respondent that though the name of the legal entity owning the establishment has been changed, the Standing Order certified on 22.07.1994 would still apply to the establishment and therefore, it was sufficient if the name of the legal entity owning the establishment alone was changed as Manali Petrochemical Limited. The 2nd respondent addressed a letter to the 1st respondent contending that the Standing Order certified for UB Petro Products Limited cannot be applied when the ownership of the establishment has changed hands. The 2nd respondent addressed a letter to the 1st respondent contending that the Standing Order certified for UB Petro Products Limited cannot be applied when the ownership of the establishment has changed hands. On 23.11.2004, the petitioner sent a detailed reply to the 1st respondent explaining the legal position that the factory at Sathangadu Village near Manali, which originally belonged to UB Petro Products Limited continues to exist, except for change in the name of the Company, that as such, it was not necessary to submit fresh standing order for certification and it would be sufficient if the name of the Company in the existing certified Standing Order is changed from UB Petro Products Limited to Manali Petrochemical Limited. (iv) On 23.03.2005, the 1st respondent has passed orders holding that by the order dated 22.07.1994, the Certifying Officer had certified the Standing Orders only in the name of UB Petro Products Limited, that thereafter the other company which came on the scene made no application for changing the name and that therefore, the Standing Orders certified on 22.07.1994 would apply only to UB Petro Products Limited. (v) It is the further case of the petitioner that under the provisions of the Industrial Employment (Standing Orders) Act (hereinafter referred to as the 'Act') every industrial establishment, wherein 100 workmen or more workmen are employed, or were employed on any day of the preceding 12 months, provided that the appropriate Government may, after giving not less than two months notice of its intention so as to do, by notification in the Official Gazette, apply the provisions of this Act to any industrial establishment employing such number of persons less than one hundred as may be specified in the Notification. (vi) The scheme of the Act is to certify standing orders for the industrial establishment and when once standing orders are certified for an industrial establishment, the same would continue to govern the conditions of the employment of workmen employed in the said establishment, irrespective of change of employer owning establishment. (vi) The scheme of the Act is to certify standing orders for the industrial establishment and when once standing orders are certified for an industrial establishment, the same would continue to govern the conditions of the employment of workmen employed in the said establishment, irrespective of change of employer owning establishment. Therefore, it is the case of the petitioner that the 1st respondent has erred in holding that the Standing Orders certified on 22.07.1994 would apply only to UB Petro Products Limited and not to Manali Petrochemical Limited and further he has failed to take note of the application made by him for changing the name of the employer of the establishment from UB Petro Products Limited to Manali Petrochemical Limited. The petitioner would state that the impugned order dated 23.03.2005 passed by the 1st respondent is vitiated by error of law and jurisdiction and it is liable to be quashed on the ground that it is contrary to the provisions of the Act and the Rules. 3. Though the order passed by the 1st respondent on 23.03.2005 is under challenge in this writ petition, no counter has been filed by the 1st respondent. The 2nd respondent has filed counter affidavit and has stated as follows: (i) According to the 2nd respondent, the draft standing orders certified by the 1st respondent on 22.07.1994 referred in para 1 of the affidavit stands in the name of UB Petro Products Limited, Manali and the said Standing Orders has been certified vide proceedings of the Joint Commissioner of Labour/Certifying Officer under the Act vide order Ref. No .R.Dis/2393/94(B) dated 22.07.1994. It was proposed by the then Management of UB Petro Products Ltd., headed by its promoter and signed before the Joint Commissioner of Labour by the then Managing Director, Mr .R. Sethu Raman of UB Petro Products Ltd. and that the Standing Orders would apply to all its employees and not for another Management. (ii) It is further stated that UB Products was in existence and there was also similar Petro Chemical industry functioning in Tamil Nadu in the name of Manali Petro Chemical, which was under different Management viz., Southern Petro Chemical Corporation. (ii) It is further stated that UB Products was in existence and there was also similar Petro Chemical industry functioning in Tamil Nadu in the name of Manali Petro Chemical, which was under different Management viz., Southern Petro Chemical Corporation. During October 1995, the SPIC took over UB Petro Products Ltd. and on taking over, the name of UB Petro Products was changed as SPIC Organics Ltd. Both Manali Petro Chemical Ltd. and SPIC Organics Ltd were managed by one Chief Manager and Managing Director. Again on 01.04.2000, SPIC Organics Ltd. was merged with Manali Petro Chemicals Ltd. with common Balance Sheet and common accounting methods. Thus, the name of UB Petro Products was changed as SPIC Organics Ltd. when the Management changed hands initially was no longer in existence as an independent company. After the merger on 01.04.2000, the company is named as Manali Petro Chemicals Ltd. only and it has two plants viz., Plant-I and Plant-II. (iii) The 2nd respondent would contend that the averment of the petitioner that UB Petro Products is called as Plant-II of the petitioner Company is not correct. Further, the issue in question does not relate to Plant-II alone. Plant-II as referred by the petitioner is not a separate factory and it is only an identification nomenclature of a part of the Company. After the merger, the Company is called as 'Manali Petro Chemicals Ltd.' The 2nd respondent would also submit that Plant-II is no longer under the control of UB Petro Products Limited and that the Certification of Standing Order dated 22.07.1994 was only for UB Petro Products and not for Manali Petro Chemical Limited. (iv) In the counter, it is further stated that as per Section 4 of the Standing Orders Act, the petitioner took the stand that there was only change of name required in the Standing Orders approved for UB Petro Products to suit the conditions of Manali Petro Chemicals Ltd. Such question is not a subject matter of the present writ petition. According to the 2nd respondent, the certified Standing Orders may be filed as draft Standing Orders for certification and that the petitioner can simply change the same as not authorised by law and that as the name has not been changed, there is no certified Standing Orders for Manali Petrochemical Ltd. in the eye of law. According to the 2nd respondent, the certified Standing Orders may be filed as draft Standing Orders for certification and that the petitioner can simply change the same as not authorised by law and that as the name has not been changed, there is no certified Standing Orders for Manali Petrochemical Ltd. in the eye of law. (v) The 2nd respondent would state that the 1st respondent, who is the authority for the certification of Standing Orders has made a legally correct order based on documents and enquiry and in his order dated 23.03.2005, he has held that the Standing Orders certified on 22.07.1994 is for UB Petro Products only and that MPL Management has not made any application for certification of a new Standing Order and treating the old one as draft. Therefore, according to the 2nd respondent, there is no infirmity with the order passed by the 1st respondent and hence prayed for dismissal of the writ petition. 4. Learned Counsel for the petitioner would submit that UB Petro Products Limited was originally an industrial establishment, for which the standing Orders was submitted and the same was certified on 22.07.1994; thereafter, in the year 1996, UB Petro Products Limited was renamed as SPIC Organics Limited and in the year 2001, SPIC was amalgamated with Manali Petro Chemical Ltd. Therefore, there is a continued establishment and there is no change of name in the ownership and that change of name was effected. Therefore, the Management applied to the 1st respondent on 23.11.2004 to incorporate the change of name of the Company in the certified Standing Orders of the establishment. Without considering the same, the 1st respondent arbitrarily passed the order taking into account the complaint made by the 2nd respondent. He would further contend that the authority has not met any of the provisions of the Act and he has not considered the applicability of the Standing Orders issued to UB Petro Products Limited to Manali Petro Chemical Limited also. 5. He would further contend that the authority has not met any of the provisions of the Act and he has not considered the applicability of the Standing Orders issued to UB Petro Products Limited to Manali Petro Chemical Limited also. 5. On the other hand, learned Additional Government Pleader for the 1st respondent in order to sustain the order of the 1st respondent has submitted that as per the provisions of the Act, the petitioner Management is a new establishment therefore, they have to make a fresh application and as per the provisions of the Act, the applicability of the Standing Order of the erstwhile Company namely, UB Petro Products Limited will not be applicable to the new establishment namely, Manali Petro Chemical Limited; hence, the order of the 1st respondent is perfectly valid. 6. A similar line of contention was raised by the counsel appearing for the 2nd respondent that as per the earlier Standing Orders, transfer of service and disciplinary action are to be initiated for change of establishment, if there is no fresh Standing Order and therefore, the Standing Order issued for UB Petro Products Limited cannot be made applicable to the present establishment and therefore, the order of the 1st respondent is justified. 7. Heard Mr. S. Ravindran, learned Counsel appearing for the petitioner, Mr. V. Viswanathan, learned Additional Government Pleader for the 1st respondent and Mr. C. Regu Rajan, learned Counsel for the 3rd respondent and perused the relevant material records. 8. In the instant case, it is seen that originally, M/s. UB Petro Products, an industrial establishment registered under the Factories Act, employing more than 50 workmen was established for the manufacture of chemicals. The Management submitted the draft Standing Order for certification under the provisions of the Act and the same was certified by the competent authority on 22.07.1994. Further, in October 1995, the Southern Petrochemical Industries Corporation (SPIC) acquired the controlling interest over M/s. UB Petro Products Limited and named the Company as SPIC Organics Limited. In that regard, the Registrar of Companies, Tamil Nadu, Madras-6 issued a fresh certificate of incorporation consequent on change of name in the matter of M/s. UB Petro Products Limited and certified that M/s. UB Petro Products Limited, which was originally incorporated on 10.10.1985 under the name, M/s. Kamar Petro Chemicals and Plastics Ltd is changed to M/s. SPIC Organics Limited. Later, in April 2000, SPIC was merged with the petitioner Management, viz., Manali Petro Chemical Limited. 9. It is further seen that this Court, by an order dated 21.03.2001 in Company Petition Nos. 581 and 582 of 2000 observed that if any proceedings are pending against the transferor company on or after the effective date, the proceedings can be continued against the transferee company and that company would be liable and bound to discharge the liability arising out of such proceedings; thereby, the petitioner Company after amalgamation with the SPIC came into existence as SPIC Organics Limited. Thereafter, by letter dated 14.07.2004, the 1st respondent called upon the petitioner Management to appear for an enquiry on 23.07.2004 at 3.00 pm regarding the application made by the 2nd respondent on 13.07.2004 requesting them to certify the draft Standing Orders on Manali Petro Chemical Limited. To the said letter of the 1st respondent, the petitioner Management submitted its objection on 24.09.2004 and by a letter dated 23.11.2004, the petitioner Management clarified the entire issue stating that the Standing Orders are certified only for a defined establishment and that the ownership of the establishment may change but the change of ownership would not affect the validity of the standing orders certified for the particular establishment; therefore, the standing orders certified on 22.07.1994 in respect of factory which was then under the control of UB Petro Products Ltd. continues to apply even as on date to the said establishment, viz., Plant II. Further, in the said letter, the petitioner Management requested the 1st respondent to incorporate the change of name of the company in the certified standing orders of the establishment and also mentioned that they are advised not to apply for fresh certification of standing orders. 10. While so, by an order dated 23.03.2005, the 1st respondent held that the Standing Orders certified for M/s. UB Petro Products Limited on 22.07.1994 will apply only for M/s. UB Petro Products Limited and not for M/s. Manali Petrochemical Limited and therefore, the said Standing Orders is not applicable to the petitioner Company. It is seen that after taking control over M/s. UB Petro Products Limited, SPIC renamed the company as SPIC Organics Limited and later it amalgamated with Manali Petro Chemicals Limited. It is seen that after taking control over M/s. UB Petro Products Limited, SPIC renamed the company as SPIC Organics Limited and later it amalgamated with Manali Petro Chemicals Limited. After the said amalgamation, the petitioner made an application to the 1st respondent stating that it is a continued establishment and hence, requested the authority to incorporate the change of name of the Company in the certified Standing Orders of the establishment. Without even referring to the said application of the petitioner Management, the 1st respondent has passed the impugned order. 11. The order of the 1st respondent is not in accordance with any of the provisions of the Act or Rules framed there under and it appears ex-facie erroneous in law and it is passed without looking into the application made by the petitioner for incorporating the change of name of the Company in the certified Standing Orders of the establishment. There is legal infirmity in the said order as the 1st respondent has not looked into the change in the legal entity owning the industrial establishment to the effect the continued applicability of Standing Orders or not to be examined and also the application for change of name of the Company for incorporating the same has not been disposed of. 12. The above aspects have not been given due consideration by the 1st respondent while passing the impugned order. Had the 1st respondent considered the petitioner's application, then the entire issue in question would be resolved. Therefore, this Court is of the view that the order of the 1st respondent dated 23.03.2005 is ex-facie erroneous and without application of mind and that the 1st respondent has not considered the relevant materials in question. Also, it suffers from infirmity since the scope of the relevant provisions under which the above order is passed has not been highlighted by the 1st respondent. 13. Accordingly, the order of the 1st respondent dated 23.03.2005 is set aside and the matter is remanded to the 1st respondent for fresh consideration by giving disposal of the application of the petitioner Management dated 23.11.2004, after giving an opportunity of hearing to the petitioner as well as the 2nd respondent and pass appropriate orders within a period of two (2) months from the date of receipt of a copy of this order. The writ petition is allowed with the above direction. No costs.