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2014 DIGILAW 835 (GUJ)

MAULESH G SHAH v. GUJARAT KAMDAR RAHAT SANGH

2014-07-30

AKIL KURESHI

body2014
ORAL JUDGMENT AKIL KURESHI, J. Petitioner has challenged an award of the Labour Court, Ahmedabad dated 2.6.2004. Brief facts are as under: Respondent No.1 is a Union of workers representing the interest of the work of one Mini Pharma, an industrial unit run by a partnership firm. Complaining about the illegal lock-out of the unit by the firm with effect from 3.10.93 and resultant lay-off of the workmen, the Union sought reference of an industrial dispute. Case of the Union was that on 3.10.93, the employer forcibly threw the workmen out of factory premises and illegally locked the unit. Such lock out continued thereafter. It was claimed that for such period the workmen were entitled to full wages. Such reference was adjudicated by the Labour Court. Under the impugned award the Labour Court held that there was an illegal lock out. Consequently, the employer was directed to pay full wages and other payable benefits to the workmen with 6% interest and cost. It is this award which the partner of the firm has challenged in this petition. Before the Labour Court as well as before me, the case of the petitioner was that the unit was managed by one of the partners of the firm. Due to multiple disputes, the working partner discontinued. Litigation was pending before civil courts. The petitioner was not aware and not interested in continuing the business. Manufacturing activity was therefore closed down. Before me, learned advocate Shri Manan Bhatt for the petitioner raised two fold contentions. Firstly, this was not a case of lock-out illegal or otherwise, but a case of closure. The Labour Court erred in coming to a contrary conclusion. Secondly, even if it was a case of illegal lock-out, only remedy is under section 26(2) of the Industrial Disputes Act, 1947 for punishment to the wrong doer. No compensation can be awarded by the Labour Court. In this context, he relied on a decision of the Supreme Court in the case of Rohtas Industries Ltd. Rohtas Industries Staff Union (1976) 2 SCC 82 . On the other hand, learned counsel Shri Karia for respondent No.1 opposed the petition contending that the Labour Court has come to factual findings which are not perverse. Ultimately, the unit never restarted its manufacturing activity virtually amounting to closure. The workmen were terminated without following due procedure. The closure was also not authorized by the competent authority. On the other hand, learned counsel Shri Karia for respondent No.1 opposed the petition contending that the Labour Court has come to factual findings which are not perverse. Ultimately, the unit never restarted its manufacturing activity virtually amounting to closure. The workmen were terminated without following due procedure. The closure was also not authorized by the competent authority. In short, according to him, the Labour Court committed no error. Having thus heard the learned advocates for the parties and having perused the documents on record, I find that from the very beginning the case of the Union was that there had been an illegal lock-out. Midway through the proceedings, the Union cannot change the track and contend that it was a case of closure and illegal termination of the workmen. In the present proceedings, at least shall have to proceed on the basis of the pleadings and evidence on record. The Labour Court having come to the conclusion that this was a case of illegal lock-out by the employer with effect from 3.10.93, when such findings are not shown to be perverse, I shall proceed on such basis. The only question then is, under such circumstances, could the Labour Court have awarded compensation for the man-days lost by the workmen. Section 24 of the Industrial Disputes Act pertains to illegal strikes and lockouts. Sub-section (1) thereof provides the case where the strike or lockout shall be illegal. Section 26 of the Industrial Disputes Act pertains to penalty for illegal strikes and lock-outs. Sub-section (2) thereof reads as under: “(2) Any employer who commences, continues, or otherwise acts in furtherance of a lock-out which is illegal under this Act, shall be punishable with imprisonment for a term which may extend to one month, or with fine which may extend to one thousand rupees, or with both.” In terms of sub-section (2) of section 26, thus, an employer found to have applied illegal lock out is punishable with imprisonment for a term which may extend to one month or with fine which may extend to one thousand rupees or with both. Section 26(2) which pertains to penalty for illegal lock-out does not refer to any compensation to the workmen to be paid for such act of the employer. In case of Rohtak Industries Ltd. (supra), a reverse case came up for consideration before the Supreme Court. Section 26(2) which pertains to penalty for illegal lock-out does not refer to any compensation to the workmen to be paid for such act of the employer. In case of Rohtak Industries Ltd. (supra), a reverse case came up for consideration before the Supreme Court. It was a case where the strike by the workmen was declared illegal. An arbitrator acting under section 10A of the Industrial Disputes Act awarded compensation of Rs.80,000/-to be recovered by the company from the workmen participating in the strike. In that context, the Supreme Court held as under: “30. Since the Act which creates rights and remedies has to be considered as one homogenous whole, it has to be regarded uno flatu, in one breath, as it were. On this doctrinal basis, the remedy for the illegal strike (a concept which is the creature not of the common law but of Section 24 of the Act) has to be sought exclusively in Section 26 of the Act. The claim for compensation and the award thereof in arbitral proceedings is invalid on its face -'on its face' we say because this jurisdictional point has been considered by the arbitrators and decided by committing an ex facie legal error.” What, therefore, appears to me is that the Labour Court declared that the lock-out was illegal, at least in terms of section 26 of the Industrial Disputes Act, direction for payment of wages for the intervening period could not have been granted. That does not mean that the workmen are left remediless. On the strength of the lockout being declared illegal, the workmen could, if so advised, seek recovery of unpaid wages under section 33C (2) of the Industrial Disputes Act or in the alternative, if their case is that ultimately the employer brought about a total closure of the business and in the process terminated the services of the workmen without following the legal procedure, it may still be open for them to challenge the termination also. I leave it open for the Union to adopt an appropriate course available in law. Insofar as the present petition is concerned, while not disturbing the conclusion of the Labour Court that there had been an illegal lock-out, final direction for payment of compensation is set aside. Rule is made absolute to the above extent.