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2010 DIGILAW 1056 (AP)

Y. Premlatha v. Hyderabad Co-operative Central Trading Society Ltd

2010-10-25

B.PRAKASH RAO, G.V.SEETHAPATHY

body2010
Judgment : B. Prakesh Rao, J. Since all these appeals arise out of a common order passed by the learned Single Judge allowing the writ petitions filed at the instance of the respondent No.1 herein and involve common question, they are taken up for disposal together. 2. Briefly, the facts on the back leading to the present lis are, that the respondent No.1, who is the writ petitioner consisting of society namely M/s. Hyderabad Co-operative Central Trading Society Limited, filed all these writ petitions, 15 in its number under Article 226 of the Constitution of India, assailing the various independent awards passed in favour of the appellants/workers wherein the orders of retrenchment passed by the Management Society on 30-6-1999 on payment of the retrenchment compensation and one month salary in lieu of notice were set aside. All the appellants are the workers similarly placed, who have been retrenched and who raised the industrial dispute by filing individual applications before Court under the provisions of the Industrial Disputes Act, 1947. 3. The case of the appellants, before the labour Court briefly was on the ground that the retrenchment compensation as arrived at and paid to them is not proper since the D.A., at the rate of 11the Labour.55% as paid to them is not correct but they should have been paid at 79.75%. Apart from that, it was their case that the management Society is financially viable, and therefore, the alleged retrenchment is wholly unsustainable. Further, it was pleaded that under the guise of restructuring, the workers, cannot be dispensed with their services. 4. Contesting all those claims at the instance of the workers, the Management Society in its resistance contended that the retrenchment compensation as paid to individual workers is perfectly correct and valid and in due compliance with the mandate under Section 25-F of the Industrial Disputes Act (for short ‘ the I.D. Act”). Further, it was pleaded by the Management that there is no possibility of resumption of the business as the wing is closed and the Management Society is in financial conundrums. 5. During the course of the enquiry, both sides produced their respective evidence, one assailing the correctness of the impugned action of retrenchment and the other by trying to sustain. Further, it was pleaded by the Management that there is no possibility of resumption of the business as the wing is closed and the Management Society is in financial conundrums. 5. During the course of the enquiry, both sides produced their respective evidence, one assailing the correctness of the impugned action of retrenchment and the other by trying to sustain. Considering the same, the Labour Court passed the awards on 22-10-2001 allowing the claim of the workers holding that the workers are entitled to the D.A., at 79.75% and therefore, there is no due payment of retrenchment compensation under Section 25-F of the I.D. Act. Further, it was held that there is no due compliance of the mandate under Sections 9-A and 25-F I.D. Act, and hence, the retrenchment orders dated 30-6-1999 were set aside with a direction to reinstate all the appellants/workmen with full back-wages and continuity of service. 6. It is these awards, which came up for challenge by filing the individual writ petitions by the Management Society under Article 226 of the Constitution of India, wherein once again falling back on the very same pleas as set forth before the Labour Court, contended that the compensation paid is correct and they are not entitled for any such higher D.A., and as regards the plea of Section 9-A of the said Act, it was stated that no such plea was specifically raised by the workers before the Labour Court, either in the application or otherwise. Therefore, the award is liable to be set aside. 7. The appellants/workers contested, wherein they sought to sustain the award of the Labour Court on their claim for D.A. at 79.75% and the compensation not being paid in the correct terms apart from the total violation of Section 9-A of the said Act having regard to the restructuring undertaken by the Management. It is further contended that having regard to the D.A., to which they would be entitled to at higher rate as already stated above, there is no due payment of compensation, and thus, it is not valid retrenchment under Section 25-F of the Act. 8. Considering all these and other submissions as made across the Bar, the learned Single Judge allowed the writ petitions. 8. Considering all these and other submissions as made across the Bar, the learned Single Judge allowed the writ petitions. While so, in regard to the first question as to the compliance of Section 25-F of the said Act, it was held that the plea as to the correct D.A., to which they would have been entitled to at 79.75% cannot form part of the scope of the enquiry and it goes beyond the dispute. Therefore, there is no violation but there is due compliance of the provisions of Section 25-F of the Act. However, on the second question as framed by the learned Single Judge as to whether the provisions of Section 9-A of the I.D. Act gets attracted. No doubt, the learned Single Judge specifically held by referring to and placing reliance on the principles as laid down in L. Robert D’ Souza v. Executive Engineer, Southern Railway (1) AIR 1982 SC 854 and M/s. Lokmat Newspapers Pvt. Ltd. v. Shankarprasad (2) AIR 1999 SC 2423 that Section 9-A of the I.D. Act gets attracted, and failure to issue notice referred to therein would vitiate the order of retrenchment. Further, referring to the principles in Hindustan Liver Limited v. Ram Mohan Ray (3) AIR 1973 SC 1156 , it was specifically held by the learned Single Judge that the situation squarely falls within the ambit of Item No.10 of the Fourth Schedule of the said Act, therefore, there is no escape from the conclusion that the provision of Section 9-A of the I.D. Act gets attracted, and thus, retrenchment undertaken by the Management Society cannot be sustained, and the orders of retrenchment are liable to be set aside on this ground. 9. Yet, by taking into consideration of the situation as to closure of the establishment in July 1998 and the attempt made by the Management Society by paying salaries for about one year thereafter while working out the feasibility of the resumption of business. It is only when they wee convinced that it is no longer feasible to resume, they resorted to retrenchment. It is only when they wee convinced that it is no longer feasible to resume, they resorted to retrenchment. Therefore, it was held that the matter should be realistic and should not confound or complicate the situation, and even if the orders are to be set aside, it only postpones the mischief, and there is no possibility that the respondent management society could provide them with the employment and that the employees could not possibly have received the emoluments without doing any work as it was never the object of the Industrial law. Placing reliance on the judgment of the learned Single Judge as he then was in E. Veera Raju v. Presiding Officer, Labour Court (4) 1999 (5) ALT 212 = 1999 (6) ALD 379 the learned Single Judge proceeded to consider on the ground that even where it was found that the order of retrenchment was violative of Section 25-F of the I.D. Act, the relief could be moulded in the form of monetary compensation, and thus, directed for payment of emoluments representing the salary of 24 months in full and final settlement of their claims as an extraordinary measure in view of the fact that the establishment in which the workers were employed remained closed since last 4 years and there is no possibility of resuming the activities. Hence these appeals. 10. Apart from the appeals by the workers as against the said judgment, the management society also filed cross-objections, challenging the findings which went against, taken up together and heart. 11. Heard Sri S. Ravindranath, the learned counsel appearing for the appellants in all these batch of cases and Sri A.K. Jayaprakash Rao, the learned counsel appearing on behalf of the respondent No.1 Management Society. 12. On a consideration of the several submissions as made across the Bar from both sides and on perusal of the entire record and material as placed before this Court, the ultimate point which arises for attention is, as to whether on the facts and circumstances, the relief as moulded is proper and correct, when it was found that there is a clear violation of Section 9-A of the I.D. Act and as to whether there is a due compliance of Section 25-F of the I.D. Act as complained against by the appellants-workers. 13. 13. Coming to the first aspect as it emerges it is necessary to extract the provisions of Section 9-A, which reads as follows: 9-A SECTION – No employer, who proposes to effect any change in the conditions of service applicable to any workman in respect of any matter specified in the Fourth Schedule, shall effect such change, - (a) without giving to the workman likely to be affected by such change a notice in the prescribed manner of the nature of the change proposed to be effected; or (b) within twenty-one days of giving such notice: Provided that no notice shall be required for effecting any such change – (a) where the change is effected in pursuance of any settlement or award; or (b) where the workmen likely to be affected by the change are persons to whom the Fundamental and Supplementary Rules, Civil Services (Classification, Control and Appeal) Rules, Civil Service (Temporary Service) Rules, Revised Leave Rules, Civil Services Regulations, Civilians in Defence Services (Classification, Control and Appeal) Rules or the Indian Railway Establishment Code or any other rules or regulations that may be notified in this behalf by the appropriate Government in the Official Gazette, apply. 14. Similarly, it also necessitates to extract Section 25-F of the I.D. Act, which reads as follows: “25-F. CONDITIONS PRECEDENT TO RETRENCHMENT OF WORKMEN:- No workman employed in any industry who has been in continuous service for not less than one year under an employer shall be retrenched by that employer until – (a) the workman has been given one month’s notice in writing indicating the reasons for retrenchment and the period of notice has expired, or the workman has been paid in lieu of such notice, wages for the period of the notice; (b) The workman has been paid, at the time of retrenchment, compensation which shall be equivalent to fifteen days’ average pay for every completed year of continuous service or any part thereof in excess of six months; and (c) notice in the prescribed manner is served on the appropriate Government or such authority as may be specified by the appropriate Government by notification in the Official Gazette.” 15. On a bare reading of either of these two provisions, primarily, there is a statutory mandate contemplated under the provisions of the I.D. Act for due compliance thereof and non-compliance would make the entire action on the part of the management as void and invalid. Necessarily, it leads to a situation for the workers to come back forth with all the attendant benefits like wages, continuity of service etc. There is no doubt in regard to this basic proposition as established. However, as could be evident that it shows that these workers no doubt were engaged in the year 1974 when the Laxmi Super Bazar was established and subsequently in July 1998 it was closed. However, once prior thereto these workers were continued and paid salary, and it is only on 30-6-1999, the Management Society has taken recourse to retrenchment and claimed that they have paid the retrenchment compensation by calculating the same on the last drawn wages apart from one month’s salary in lieu of notice as contemplated under Section 25-F of the I.D. Act. There is no dispute to the fact that there is any similar such notice or an attempt on the part of the Management Society to take an steps in pursuance of the notice or otherwise, as provided under Section 9-A of the I.D. Act. Admittedly, the retrenchment orders do refer to the situation a specific reason, warranting such retrenchment being a closure of the unit. Therefore, it attracts the provision of Section 9-A of the I.D. Act as rightly held by the learned Single Judge in terms of the contents of the aforesaid provision and the principles laid down in Hindustan Liver Limited (3 supra). Though, there is a cross-objection on the part of the respondent herein as far as these findings are concerned, however, having regard to the mandate as provided under the said provision and the principles, as arising, there is no other escape but to hold that there is a clear violation and necessarily it calls for the resultant benefits to which the workers would be entitled to under the law. As far as the compliance of Section 25-F of the Act is concerned, no doubt, the claim of the workers is at a higher rate than the one which has been calculated by the Management Society. As far as the compliance of Section 25-F of the Act is concerned, no doubt, the claim of the workers is at a higher rate than the one which has been calculated by the Management Society. Though the point on the entitlement of higher D.A., was sought to be objected to on the ground that the plea was not taken at the appropriate time, namely, either at the initial application or as one amongst the pleas in the petition filed raising a dispute, which argument appears to have been made at all levels and this Curt, one opposing and another trying to place a reliance on such entitlement. The fact that they would be entitled to such higher D.A., is not seriously disputed nor anything on record on behalf of the management society shown as to how the workers claim should be restricted to the lesser quantum as accounted for while calculating compensation. Before adverting to the very entitlement as such, the query which needs to be answered is, as to whether absence of plea would disentitle to make any such claim. The principles of law of pleadings are well enunciated and several parameters have been laid down under the normal civil and criminal proceedings and the procedure prescribed there under. The requirement as to the plea being raised specifically is considered to be a mandatory one since the whole concept rests on the follow-up of principles of natural justice where the other side should have an opportunity to know and equally defend or oppose. Yet, even in those proceedings, if the plea is such which goes to the very root of the case and without warranting any enquiry, the same could be allowed even at the highest level even though no proper foundations are made at the lower level. That apart, these well known principles as applicable to the pleadings, which is purely a procedural one, cannot have any application to the proceedings under the Industrial or Labour jurisprudence or the Courts or the authorities sitting over these disputes. The authorities as constituted under the provisions of the I.D. Act 1947 and various other laws totally stand apart from the regular courts or tribunals and no alternatives can be prescribed or put against any other parties. The authorities as constituted under the provisions of the I.D. Act 1947 and various other laws totally stand apart from the regular courts or tribunals and no alternatives can be prescribed or put against any other parties. Therefore, we are of the view that without applying narrow and stricter manner, the absence of plea and the consequences thereof, we hold that the authorities and the Courts under the Industrial law have ample powers and jurisdiction to allow a plea especially of this nature. Hence, we do not find much substance in the objection raised on behalf of the management society that since no such plea was raised down below it could not be allowed all above. 16. The learned Single Judge refused to accept the said plea for higher D.A., at 79.75% only on the premise that it cannot constitute the subject matter of discussion or enquiry in the proceedings where the order of retrenchment is in question. This, on the prima facie, we are in entire agreement with the learned Single Judge as the provision is quite mandate and contemplate the payment of compensation to which they would be entitled to. Necessarily, it needs enquiry into the correctness of the quantum, which has been stated to have been paid by the Management Society. Admittedly, the Management has taken into consideration the last drawn wages, but there is no explanation forthcoming nor any reason has been stated, much less, to say that they would not be entitled to any such D.A., at 79.75%. Therefore, even on this court we are of the view that the Management should have taken into account the calculation by including the D.A., at 79.75%, but not at 11.55%. All these liabilities arise out of the statutory requirement and for which there is no escape or any excuse on the part of the Management Society. Therefore, we specifically hold that there is no clear cut payment of compensation to the respective workers as they would be entitled to under the law. 17. Coming back to the consequence which has to follow for the admitted situation where the provision of Section 9-A of the said Act is not complied with, the learned Single Judge sought to proceed on the ground of impracticalities in implementing any such consequential directions to which normally they could have got. 17. Coming back to the consequence which has to follow for the admitted situation where the provision of Section 9-A of the said Act is not complied with, the learned Single Judge sought to proceed on the ground of impracticalities in implementing any such consequential directions to which normally they could have got. All these circumstances cannot outweigh a legal right to which one would be entitled to. It is not the case of the Management Society that the entire society itself is closed down and is not functioning. Therefore, the liability whatever occurs and arises as a result of any legal action certainly has to be fastened on the society, which is very much running. Therefore, merely because the establishment is closed as a policy decision taken within its administration affairs, that would not absolve the Management Society escaping from the liability. The learned Single Judge by placing the reliance on the judgment of a learned Single Judge as he then was in E. Veera Raju v. Presiding Officer (4 supra) held that such an approach could not possibly arise having regard to the mandate and the resultant consequence that would follow. It has been held by various authorities that mandate under Section 9-A is quite strict and cannot be escaped by taking recourse to any other alternative mode. Admittedly, there is no such notice given to the respective workers, and necessarily, it follows that any such retrenchment recourse would be totally void and non set as held in Workmen of the Food Corporation of India v. Food Corporation of India (5) 1985 (2) SCC 133 and Lokmat Newspaper Pvt. Limited (2 supra). 18. Therefore, having regard to such a mandate and the principles as emerged from the aforesaid provision and there being no due compliance thereof, admittedly, we have no other option but to hold that the impugned action of retrenchment is totally vitiated not only on the ground of noncompliance of Section 9-A of the I.D. Act, but also the violation of Section 25-F of the I.D. Act. 19. In the circumstances, we allow the appeals and the Judgment of the learned Single Judge in W.P.No.8923, 8928, 8931, 9224, 8924 and 9223 of 2002 is set aside and the awards of the labour Court in I.D.No.116/1999, I.D.No.124/199, I.D.No.129/1999, I.D.No.117/1999, I.D.No.119/1999 and I.D.No.121/1999, dated 22-10-2001 are restored. Consequently, Cross-Objection Nos. 19. In the circumstances, we allow the appeals and the Judgment of the learned Single Judge in W.P.No.8923, 8928, 8931, 9224, 8924 and 9223 of 2002 is set aside and the awards of the labour Court in I.D.No.116/1999, I.D.No.124/199, I.D.No.129/1999, I.D.No.117/1999, I.D.No.119/1999 and I.D.No.121/1999, dated 22-10-2001 are restored. Consequently, Cross-Objection Nos. 105893, 105894, 105889, 105896, 105891 and 105890 of 2002 stands dismissed. No costs.