Research › Search › Judgment

Karnataka High Court · body

2013 DIGILAW 1035 (KAR)

Employees Sparr Group of Companies Namely M/s. Sparr Equipments Limited v. Sparr Equipments Limited

2013-09-03

RAM MOHAN REDDY

body2013
ORDER Ram Mohan Reddy, J. 1. Petitioner-Employees Association aggrieved by the order dated 26-5-2011 in Application No. 23 of 2005 of the I Additional Labour Court, Bangalore, has preferred this petition invoking Article 227 of the Constitution of India. It is the case of the petitioner that being a Trade Union espoused the cause of its members, more appropriately employees of the 1st respondent-Industrial Establishment, by filing an application under Section 33-C(2) of the Industrial Disputes Act, 1947 (for short, the 'Act'), to compute in terms of money benefits due, as also a memo of calculation, registered as Application No. 23 of 2005. Petitioner alleged that the assets of the 1st respondent was taken over by the 2nd respondent-Karnataka State Industrial Investment Development Corporation (for short, 'KSIIDC') and the 3rd respondent-M/s. Karnataka State Financial Corporation (for short, 'KSFC'), who in turn put up for public auction the said assets which was purchased by the 4th respondent-company and therefore all the respondents are liable to make payment of the employees dues. According to the petitioner, the employer i.e. the 1st respondent was due to M/s. KSIIDC and KSFC having not repaid loans borrowed from them. Petitioner is said to have filed O.S. No. 392 of 1995 before the Munsiff Court, Nelamangala for injunction against the proposed sale which was withdrawn on the directions of this Court in W.P. No. 6321 of 1996 while reserving liberty to prosecute the matter for appropriate reliefs. In addition it was asserted that the Assistant Labour Commissioner had taken note of the fact that the employees were kept out of employment from 23-11-1994 and therefore their dues which include compensation, leave, bonus to be quantified under appropriate laws. 2. The first respondent remained absent and unrepresented, while the 2nd respondent opposed the application by filing statement of objections inter alia pointing out to the order in W.P. No. 6321 of 1996 and the fact that despite receipt of sale consideration of Rs. 150 lakhs nevertheless, on apportionment, the 1st respondent was due in a further sum of Rs. 45 lakhs and therefore, there was no possibility of complying with the direction in W.P. No. 6321 of 1996 to keep in deposit any excess money recovered from the sale of the assets of the 1st respondent. 150 lakhs nevertheless, on apportionment, the 1st respondent was due in a further sum of Rs. 45 lakhs and therefore, there was no possibility of complying with the direction in W.P. No. 6321 of 1996 to keep in deposit any excess money recovered from the sale of the assets of the 1st respondent. The 4th respondent too filed statement of objections to the application stating that it had made an offer for purchase of the assets of the 1st respondent in response to the sale notification issued by the 2nd respondent, which offer when accepted, only the assets of the 1st respondent were sold and not the ongoing concern of the 1st respondent. 3. Before the Labour Court applicant examined two witnesses as A.Ws. 1 and 2 being Union leader and one of the workman, respectively, and marked 22 documents as Exs. A. 1 to A. 22, while for the respondents, 4th respondent examined two witnesses as R.Ws. 1 and 2 and marked 5 documents as Exs. R. 1 to R. 5. The Labour Court having regard to the material on record and the orders dated 10-2-1998 in W.P. No. 6321 of 1996 and dated 5-8-2005 in W.P. No. 9325 of 2000, observed that the 2nd respondent had not been left with any excess amount after apportionment of the amounts to its dues, from out of the sale consideration and therefore no direction could be issued to respondents 2 and 3 to pay monies from out of the sale consideration. So also since 4th respondent the purchaser of the assets of the 1st respondent-establishment, in terms of the sale notification issued by the 3rd respondent, there being no jural relationship or privity of contract, 4th respondent could not be mulched with the responsibility to pay the amount. In addition, the Labour Court observed that there were no documents to establish the period of service rendered, the salary paid, leave available to the credit of the workman, or profit made and whether any bonus was announced or paid and if so at what rate by the 1st respondent and therefore, declined to accept the plea of the respondent that Rs. 2,82,97,142/- was due and payable to the workman and accordingly by the order dated 26-5-2011 impugned rejected the application. 4. Heard the learned Counsel for the parties, perused the pleadings and examined the order impugned. 5. 2,82,97,142/- was due and payable to the workman and accordingly by the order dated 26-5-2011 impugned rejected the application. 4. Heard the learned Counsel for the parties, perused the pleadings and examined the order impugned. 5. In the case of Surya Dev Rai v. Ram Chander Rai and Others : AIR 2003 SC 3044 : (2003) 6 SCC 675 , the distinction between Articles 226 and 227 of the Constitution of India, more appropriately over working rules it was observed that supervisory jurisdiction under Article 227 of the Constitution is exercised for keeping the Subordinate Courts within the bounds of their jurisdiction, i.e., whether the Subordinate Court has assumed a jurisdiction which it does not have or has failed to exercise jurisdiction which it does not have or has failed to exercise a jurisdiction though available is being exercised by the Court in a manner not permitted by law and failure of justice or grave injustice has occasioned thereby. 6. It was further observed that be it writ of certiorari or the exercise of supervisory jurisdiction, none is available merely to correct errors of fact or of law unless the error is manifest and apparent on the face of the proceedings such as when it is based on clear ignorance or utter disregard of the provisions of law and grave injustice or gross failure of justice has occasioned thereby. A patent error is an error, it was held, which is self-evident which can be perceived or demonstrated without involving into' any lengthy or complicated argument or a long drawn process of reasoning and where two inferences are reasonably possible and the Subordinate Court has chosen to take one view the error cannot be called gross or patent. The High Court, it was further observed, in exercise of certiorari or supervisory jurisdiction will not convert itself into a Court of appeal and indulge in reappreciation or evaluation of evidence or correct errors of mere formal or technical character. 7. The High Court, it was further observed, in exercise of certiorari or supervisory jurisdiction will not convert itself into a Court of appeal and indulge in reappreciation or evaluation of evidence or correct errors of mere formal or technical character. 7. Regard being had to the parameters over exercise of jurisdiction under Article 277 of the Constitution of India by High Courts, as noticed supra, it is needless to state that in the facts and circumstances of this case, more appropriately invoking Section 33-C(2) of the Act to compute in terms of money the benefits, it was for the applicant to place before the Labour Court relevant material constituting substantial legal evidence of the fact that they were the employees of the 1st respondent; that they were refused employment from a particular day; and declaration of bonus by the 1st respondent in order to enable the Labour Court to compute in terms of money, the benefits that the petitioner was entitled to. The uncorroborated, oral testimony of one of the applicant and the Labour Union leader, in the absence of relevant records relating to employment and other particulars, the Labour Court was fully justified in recording a conclusion that there was no material on record to compute in terms of money the benefits that the petitioner Union had espoused. Merely because the 1st respondent-Industrial establishment had remained absent and was unrepresented, that by itself does not mean that the petitioner without placing relevant material to substantiate its claim, is entitled to the reliefs. 8. Regard being had to the fact that KSIIDC and KSFC are State Financial Corporation having financed the 1st respondent-Industrial establishment which failed to repay the dues, exercised jurisdiction under the State Financial Corporations Act, 1951 to recover its dues by taking over the assets of the 1st respondent on 5-4-1995 and sold the same in a public auction to the 4th respondent, no exception can be taken to the reasons and findings of the Labour Court in rejecting the claim of the petitioner for payment of dues to the members of the petitioner Union. In the absence of material to establish that 4th respondent had taken over not only the assets of the 1st respondent-Industrial establishment but also as a going concern, 4th respondent was not liable to answer the claim of the petitioner. In the absence of material to establish that 4th respondent had taken over not only the assets of the 1st respondent-Industrial establishment but also as a going concern, 4th respondent was not liable to answer the claim of the petitioner. Yet again having regard to the orders of this Court in the two writ petitions noticed supra, it is a matter of fact that 3rd respondent did not recover dues in its entirety as the sale consideration of Rs. 150 lakhs from out of sale, by way of public auction, was insufficient so as to make it available as against the workmen's dues. In the circumstances, petition devoid of merit, the order impugned does not call for interference. In the result, the petition is accordingly rejected.