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2011 DIGILAW 693 (AP)

VST Industries Limited v. Presiding Officer, The Industrial Tribunal-Cum-The Labour Court, Mr. K. Papaiah, The Additional Secretary To The Government

2011-08-26

N.RAVI SHANKAR

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JUDGMENT : N. RAVI SHANKAR, J. 1. As similar points are involved in all these five writ petitions they are being disposed of by this common order. 2. The circumstances which led to the filing of these writ petitions should be noted before the points which arise in them are taken up. The petitioner in all these five writ petitions is VST Industries Limited (here in after wards for convenience referred to as employer). The employer is stated to be in the business of manufacture of cigarettes and for its business it opened a depot at Jammikunta for purchase of leaf tobacco and its storage there. Its plea is that it employed contesting respondents who raised industrial disputes in question as casual workers/ security guards on casual basis for guarding the depot during seasonal operations. Its further case is that subsequently due to its business exigencies it closed down the said depot/godown at Jammikunta with effect from 01.03.2000. 3. The five persons who claimed to be the workmen of the employer brought five ID cases viz., I.D. No. 77/2000, I.D. No. 79/2000, I.D. No. 82/2000, I.D. No. 80/2000 and I.D. No. 78/2000 before the Industrial Tribunal-cum-Labour Court, Godavarikhani (for short tribunal), claiming reinstatement into service on the ground that the employer unjustifiably shifted its operations of purchasing tobacco to Hyderabad. In the alternative it is seen that they claimed compensation and gratuity on the plea that their termination amounts to retrenchment. Their plea was that each of them has put in more than 5 to 10 years of service under the employer prior to the closure and therefore by virtue of the same they are entitled to notice, compensation and gratuity. It is seen that in substance they made the above claims for compensation and other amounts in view of Section 25FFF of the Industrial Disputes Act, 1947 (for short Act), which deals with closure of a unit and also the legislation relating to payment of gratuity. 4. The stand of the employer before the tribunal was that it employed the five claimants in the ID cases only on casual basis and none of them worked for more than one year or for 240 days at any time and more particularly in the one year preceding the date of the closure of the depot or and therefore their claims are untenable. 5. 5. Both sides let in their evidence before the tribunal in each of the five ID cases. The tribunal after considering the each ID case passed separate awards all dated 15.10.2001 holding that the five persons who claimed to be the workmen of the employer are entitled to compensation and gratuity on the closure of the employer's undertaking/depot. It is seen that it granted the compensation amounts u/s 25FFF of the Act on the finding that the workmen were entitled to compensation on the closure of the depot at Jammikunta and it also awarded gratuity amounts in three writ petitions. The employer filed these five writ petitions seeking writs of certiorari for quashing the said awards. The details of the writ petitions challenging the ID Awards and the names of the workmen who are contesting respondents in the writ petitions are as below. S. No. W.F. Number I.D. No. Name of the Workman 1. 2437/2002 77/2000 K. Papaiah 2. 2438/2002 79/2000 K. RajeshwarRao 3. 2439/2002 82/2000 S. Srinivas 4. 2440/2002 80/2000 N. Komuraiah 5. 2494/2002 78/2000 P. Mallaiah 6. Sri Sridharan the learned counsel for the employer pointed out that the initial burden of showing that a workman has worked continuously for 240 days or more in the year preceding the date of closure lies upon the workman and once he discharges that burden it is the burden of the employer to disprove the same. His argument is that the evidence let in by the workmen in all cases would show that each of them failed to discharge his initial burden on the above aspect and the tribunal committed an error in ignoring the same and the evidence on record. He further pointed out that the tribunal went on to award gratuity money also though it has no jurisdiction under the Act as the same has to be decided under the provisions of the Payment of Gratuity Act. He also relied upon Supreme Court decisions in support of his above contentions and I shall mention them a little later. 7. On the other hand, Sri B. Sudhakar Reddy the learned counsel appearing for all the workmen in all the five cases pointed out that the workmen have let in sufficient evidence from their side to prove their cases and therefore the tribunal cannot be said to have committed any error in awarding compensation for closure of the depot. 7. On the other hand, Sri B. Sudhakar Reddy the learned counsel appearing for all the workmen in all the five cases pointed out that the workmen have let in sufficient evidence from their side to prove their cases and therefore the tribunal cannot be said to have committed any error in awarding compensation for closure of the depot. He also pointed out that the direction of the tribunal for payment of gratuity and other amounts is also proper and therefore the awards do not call for any interference. 8. In the light of the above contentions two points arise for determination. The first is whether the tribunal has jurisdiction to award amount towards gratuity while exercising jurisdiction under the Act. This point arises only in three of these writ petitions. The second is whether each of the five workmen is entitled to compensation contemplated u/s 25FFF of the Act on the closure of employer's depot and this arises in all the writ petitions. It should be mentioned here that that though the workmen took a plea that the closure of the depot was not justified they have not contested the said issue before the tribunal and here also their learned counsel only justified the award of compensation and gratuity amounts. Hence the question whether or not the closure is right or wrong does not arise here. 9. Coming to the first point, the tribunal has awarded gratuity amounts in addition to compensation only in three awards and they are challenged in W.P. No. 2437 of 2002, WP. No. 2440 of 2002 and W.P. No. 2494 of 2002. Sri Sridharan relied upon a decision of the Supreme Court given in State of Punjab Vs. Labour Court Jullunder and Others, AIR 1979 SC 1981 in support of his contention that the tribunal acting under the Act has no jurisdiction to award gratuity. This decision supports his contention. This was a case where the workmen made a claim u/s 7B of Payment of Gratuity Act, 1972, u/s 33C(2) of the Act as a dispute was raised by the other side regarding payment of the same. 10. This decision supports his contention. This was a case where the workmen made a claim u/s 7B of Payment of Gratuity Act, 1972, u/s 33C(2) of the Act as a dispute was raised by the other side regarding payment of the same. 10. After considering the provisions of the Payment of Gratuity Act, 1972, the Supreme Court held that the provisions of the said Gratuity Act show that it is a self contained code and the remedies for claiming gratuity have to be worked out under the said Act itself and such claim cannot be adjudicated under the Act. This decision is of 1979 and it is brought to my notice that it still holds the field. Sri Sudhakar Reddy could not bring to my notice any provision or authority to ignore the above decision. 11. Thus in view of the above legal position it follows that the payment of gratuity ordered in the three awards which are questioned in the above three writ petitions has to be set aside and this point is decided in favour of the petitioner. 12. The second point is now taken up. The criteria for awarding compensation u/s 25FFF of the Act which deals with closure of an undertaking is that the workmen in question should have been in continuous service for not less than one year (i.e. 240 days as contemplated u/s 25B of the Act) in that undertaking or depot immediately before the date of such closure. In the present case the establishment or undertaking is admittedly a depot opened for purchasing leaf tobacco and the employer had to close down the depot because of its business exigencies. The closure as such, as stated supra, is not under challenge in these writ petitions. 13. In Krishna Bhagya Jala Nigam Ltd. Vs. Mohammed Rafi, AIR 2006 SC 3363 relied upon by Sri Sridharan, the Supreme Court has held that to claim retrenchment compensation under Sections 25B and 25F of the Act the initial burden of showing that the workman has worked for a continuous period of 240 days in a year lies upon him and this legal position was stated after considering the previous case law on the point. Then in Dy. Then in Dy. Executive Engineer I and P, RC Dept., and Anr., v. Padamati Balaramaiah (A.P.) 2002 (3) LS 232 (D.B.) a Division Bench of this court categorically held that for a workman' to be entitled to retrenchment compensation u/s 25F he must have put in 240 days of continuous service immediately preceding the date of retrenchment and that even if he has put in more than 240 days of service in several spells during several years he cannot be granted retrenchment compensation. These propositions of law are also applicable to payment of compensation u/s 25FFF of the Act and there is no dispute on this aspect. Basing on the above propositions of law it has now to be seen whether the impugned awards directing payment of compensation following the closure of employer's depot can be sustained. 14. It may be noted that this court in exercising certiorari jurisdiction cannot interfere with findings of fact recorded by the tribunal under the Act unless it is shown that the said findings and conclusions are against law or are based on no evidence at all in which event it can be said to be an error apparent on the face of the record which can be treated as an error of law. Sri Sridharan says that the tribunal has totally ignored the principles relating to burden of proof and the evidence on record and the legal position relating to proof of 240 days of service stipulated in Section 25FFF of the Act and Section 25B of the Act laid down in the above two decisions and therefore the awards should be set aside as the workmen failed to establish their cases and as the evidence let in by the employer is enough to reject their cases. Sri B. Sudhakar Reddy's contention is that the tribunal has considered all aspects and therefore there is no reason to disturb the awards with regard to compensation. To examine these rival contentions and decide the point, it has become necessary now to examine the evidence and the findings of the tribunal. 15. Coming to the evidence, each of the five workmen in support of their respective cases have given evidence as W.W 1 in each of their cases/IDs and further they examined two other witnesses viz., Ponaganti Veeramallu and Itikela Yadagiri as W.W 2 and W.W 3. 15. Coming to the evidence, each of the five workmen in support of their respective cases have given evidence as W.W 1 in each of their cases/IDs and further they examined two other witnesses viz., Ponaganti Veeramallu and Itikela Yadagiri as W.W 2 and W.W 3. These two witnesses are common in all the ID cases. It appears that the evidence of W.W 2 and W.W 3 has been recorded in I.D. No. 77 of 2000 pertaining to W.P. No. 2347 of 2002 and copies of their depositions have been placed in the other ID cases. 16. A perusal of the evidence of W.W 2 and W.W 3 would show that they introduced themselves as tobacco growers who used to sell their tobacco to the employer and that is how they claimed that they knew about these five workmen and their employment in the employer's depot. In their cross examination both of them stated that they do not have any documents to show that they used to sell tobacco to the employer and in fact if they had been selling tobacco to the employer they would have had some documents such as acknowledgments for delivery of tobacco or some payments received, but they did not file the same. In their further cross examination both these witnesses stated that they do not know what the workmen were doing in the employer's organisation/depot and what were their wages. These answers of these two witnesses would show that they gave evidence only at the behest of the workmen without knowing what was the work of the workmen in the employer's depot. Thus their evidence cannot be of any help to the workmen. 17. Of-course, each of the workmen in support of his case, himself, gave evidence. However, as will be presently seen, the oral evidence of the workmen and the documents filed by them cannot be said to be sufficient to conclude that all of them worked continuously for 240 days in the year immediately preceding the date 29.02.2000 which is the date of closure even according to them, though it is the case of the employer that the depot was closed on 01.03.2000. The essential requirement for invocation of Section 25FFF of the Act is that a workman must have continuously worked 240 days in the year immediately preceding the date of closure and it has to be seen that whether the workmen have established the above requirement. 18. It may be noted that in the case of Sri P. Papaiah, the workman in W.P. No. 2347 of 2002, he filed Exs.W 1 and W2 which are his Employees Provident Fund Scheme (EPFS) account which are for 1997-98. They, at best, show that he worked only during 1997-98. In his case, the employer filed Ex.M 1 attendance sheet (copy) and Ex.M 2 attendance sheet (copy), as per the EPFS for the years 1996-1997 and 1997-1998. The employer also filed Ex.M 3 attendance sheet copy and Ex.M 4 attendance sheet copy as per EPFS showing that he worked as casual workman during 1996-1997. The above documents would show that this workman Papaiah worked only during the period 1996-97 and 1997-98, but he did not file any proof to show that he continuously worked for 240 days in the period covered by the year preceding the date of closure i.e., 29.02.2000. 19. So is the case with the other four workmen also. It may be noted that with regard to K.Rajeshwar Rao the workman concerned in W.P. No. 2438 of 2002 he filed only Ex.W 1 which is a copy of his EPFS sheet which shows that he worked during the period 1998-1999. This does not contain the number of days for which he worked during that year. On the other hand, the employer filed Ex.M 1 copy of attendance sheet for casual field workers and Ex.M 2 copy of attendance sheet as per EPFS. In fact Ex.M 2 shows that for the years 1996-97, 1997-98 and 1998-99 Rajeshwar Rao worked for 212, 182 and 359 days. Both Ex.M 1 and Ex.M 2 are silent regarding the number of days for which he worked from April 2009 to 29th February 2000. Thus it cannot be said that Sri Rajeshwar Rao has discharged his initial burden of showing that he continuously worked for 240 days in the year preceding to 29.02.2000. 20. Similarly the workman Sri S. Srinivas concerned in W.P. No. 2439 of 2002 filed copies of his EPFS account for 1998-99 and they are marked as Exs. W 1 to W3 in his case. 20. Similarly the workman Sri S. Srinivas concerned in W.P. No. 2439 of 2002 filed copies of his EPFS account for 1998-99 and they are marked as Exs. W 1 to W3 in his case. They do not show that he worked for more than 240 days in the year preceding 29.02.2000. In his case the employer filed Exs. M 1 and M 2 which are copies of his attendance particulars as casual clerk for the years 1996 to 2000 and his attendance sheet as per his EPFS for the year 1996-97 to 1999-2000. Even according to Ex. M 2 he worked only for 62, 98 and 93 days during the period 1996-97 to 1998-99 and for 1999-2000 the number of working days is shown 'nil'. This workman has also failed to discharge his initial burden to show that he continuously worked for 240 days in the year preceding 29.02.2000. 21. Then coming to the case of N. Komuraiah the workman concerned in W.P. No. 2437 of 2002, he filed Exs. W 1 and W2 which are copies of his EPFS account for the year 1997-98. They do not show for how many days he worked during those years. In his ID case, the employer filed Exs. M 1 to M4. Ex. M 1 is a copy of his attendance sheet as casual security guard and. it shows that he worked in 1996-97 and 1997-98 for 30 and. 92 days. Ex. M 2 is a copy of the attendance as per his EPFS account and it shows that in 1996-97 and 1997-98 he worked for 89 and 133 days. Then Ex. M 3 is a copy of the attendance sheet showing that he worked as casual workman in 1996 for 31 days and in 1997 for 51 days. Ex. M 4 is an attendance sheet copy as per his EPFS account and that confirm the attendance shown in Ex. M 3. It should be noted that this workman did not file any document to show that he worked continuously for 240 days in the year preceding 29.02.2000. 22. Then coming to the case of P. Mallaiah, workman concerned in W.P. No. 2494 of 2002, he filed Ex. W 1 which is a copy of his EPFS account for the year 1997-98. In his ID case, the employer filed Exs. M 1 to M4. Ex. 22. Then coming to the case of P. Mallaiah, workman concerned in W.P. No. 2494 of 2002, he filed Ex. W 1 which is a copy of his EPFS account for the year 1997-98. In his ID case, the employer filed Exs. M 1 to M4. Ex. M 1 is a copy of his attendance sheet as casual security guard and it shows that he worked for 15 days in 1996, for 60 days in 1997 and 33 days in 1997. Ex. M 2 is a copy of the attendance as per his EPFS account and it shows that in 1996-97, 1997-98 and 1998-99 he worked for 15, 88 and 5 days respectively. Then Ex. M3 is a copy of the attendance sheet showing that he worked as casual clerk in 1996 for 15 days and in 1997 for 54 days and in 1998 for 31 days. Ex. M 4 is an attendance sheet copy as per his EPFS account and it shows that he worked for 69 days in 1996-97. It should be noted that this workman did not file any document to show that he worked continuously for 240 days in the year preceding 29.02.2000. 23. It may be noted the case of the employer is that it employed all the five workmen for sometime as casual workers or casual security guards for different periods or spells 1995 onwards as shown by it in its documents, but its plea is that it never employed these workmen in the year preceding the date of closure i.e. 29.02.2000. Its case in that behalf stands probablised by the documents filed by it and the workmen failed to discharge their initial burden of showing that they worked continuously for 240 days as contemplated u/s 25B of the Act immediately preceding the date of closure i.e. 29.02.2000. The oral evidence let in by the workmen does not take them anywhere in proving their case in that behalf. 24. The tribunal in its awards simply discussed about the documents filed by the workmen and holding that since the employer failed to file its attendance registers the case of the workmen should be accepted. The oral evidence let in by the workmen does not take them anywhere in proving their case in that behalf. 24. The tribunal in its awards simply discussed about the documents filed by the workmen and holding that since the employer failed to file its attendance registers the case of the workmen should be accepted. This finding of the tribunal cannot be said to be based on evidence at all to hold that each of the workmen continuously worked for 240 days immediately preceding the date of closure of the depot which is already taken as 29.02.2000. In the face of the evidence let in by the both sides the non-filing of attendance registers by the employer cannot assume any importance. The evidence on record let in by both sides would show that there is nothing in it to conclude that each of the workmen have worked continuously for more than 240 days in the year preceding the date of closure which is the essential requirement stipulated in Section 25FFF of the Act for upholding their claim for compensation. 25. It should also be noted in this connection that in the common legal notice dated 29.04.2000 which was issued on behalf of all the five workmen to the employer before filing the ID cases, it is mentioned that the workmen N. Komuraiah, K. Papaiah and P. Mallaiah (concerned in W.P. No. 2440 of 2002; W.P. No. 2437 of 2002 and W.P. No. 2494 of 2002) worked from 01.01.1971, 01.08.1985 and 01.10.1993, respectively but they did not adduce any evidence in support of the same. Added to this it is also averred in the said notice that the field workers were given power to sign the cheques to be given to the growers of tobacco to withdraw the amounts from the banks. Here the expression 'field workers' used in the above legal notice refers to these workmen. They failed to explain under what authority the said cheque power was given though the employer denied the same in its reply notice dated 31.05.2000. The above pleas taken in the legal notice of the workmen would only show to what extent they can go without any basis and looked at from the totality of the circumstances their case does not inspire any confidence regarding their claims for 'closure compensation'. 26. The above pleas taken in the legal notice of the workmen would only show to what extent they can go without any basis and looked at from the totality of the circumstances their case does not inspire any confidence regarding their claims for 'closure compensation'. 26. The above circumstances show that the tribunal totally ignored the requirement in Section 25FFF of the Act and the proposition of law laid down by a Division Bench of this court in Padamati Balaramaiah's case (3 supra) to award 'closure compensation'. Hence it follows that the findings of the tribunal on this aspect warrant interference by this court as the said findings can be said to be against law and not supported by evidence. If the said findings are set aside it follows that all the awards with regard to award of compensation u/s 25FFF of the Act cannot be sustained and the second point is also decided in favour of the employer. 27. Accordingly all these five writ petitions are allowed and the impugned awards are set aside. No costs.