J. K. COTTON MILLS KARMCHARI AUDYOGIK UTPADAN SAHKARI SAMITI v. STATE OF U. P.
2015-04-03
SUDHIR AGARWAL
body2015
DigiLaw.ai
JUDGMENT Hon’ble Sudhir Agarwal, J.—Heard Miss. Bushra Maryam, Advocate for petitioner. On behalf of respondents Sri V.B. Singh, learned Senior Advocate assisted by Smt. Kirtika Singh, Advocate, advanced his argument, in part, on 25.8.2014, whereafter the case was directed to be listed on 3.9.2014 for further hearing, as agreed by learned senior counsel but on 3.9.2014 and 15.9.2014 consistently adjournment request on his behalf came which was accepted. Ultimately on 17.9.2014 though the case was called in revised but none appeared on behalf of respondents. In these circumstances, the Court closed the hearing, concluded argument and reserved judgment. 2. This writ petition has been filed by a workers union, namely, J.K. Cotton Mills Karamchari Audhyogik Utpadan Sahkari Samiti, seeking a writ of certiorari quashing the impugned order/notification dated 31.12.2008 (Annexure-11 to the writ petition). A writ of mandamus has also been sought commanding the respondents to make payment of wages pursuant to recovery certificates No. 3105, 3106, 3107, 3108, 3109, 3110, 3111, 3112, 3113, 3114, 3115, 3116, 3117, 3118, 3119, 3120, 3121, 3122, 3123, 3124, 3125 and 3126 dated 25.1.1991 issued under the provisions of U.P. Industrial Peace (Timely Payment of Wages) Act, 1978 (hereinafter referred to as the “Act, 1978”). 3. By amendment allowed by this Court vide order dated 22.2.2011 two more prayers have been added as under: (v) To issue a writ, order or direction in the nature of certiorari commanding the Respondent No. 4 to bring up the records of the proceedings dated 4.6.2008 passed in Case No. 81 of 1990 (Anenxure No. 6 to the writ petition) and get it quashed by this Hon’ble Court. (vi) To issue a writ order or direction in the nature of certiorari commanding the respondent No. 1 to bring up the records of the notification dated 24.10.2008 having its reference as notification No. 955/36-20088 (S.M.)-92 and get it quashed by this Hon’ble Court.” 4. The facts, in brief, giving rise to the dispute in present writ petition are as under. 5. M/s J.K. Cotton Spinning and Weaving Mills Ltd. (hereinafter referred to as the “Company”), engaged in the manufacturing of blended yarn and fabrics, had a textile mill/factory at Kalpi Road, Kanpur. It was established in 1924. It fell sick due to various reasons and the management declared lock out w.e.f. 15.5.1989.
5. M/s J.K. Cotton Spinning and Weaving Mills Ltd. (hereinafter referred to as the “Company”), engaged in the manufacturing of blended yarn and fabrics, had a textile mill/factory at Kalpi Road, Kanpur. It was established in 1924. It fell sick due to various reasons and the management declared lock out w.e.f. 15.5.1989. The State Government issued notification under Section 3 of U.P. Industrial Disputes Act, 1947 (hereinafter referred to as the “Act, 1947”) on 17.5.1989 banning lock out in the Company. The aforesaid notification was extended by further notifications dated 15.11.1989, 12.1.1990 and 19.12.1990. The aforesaid notification was challenged by Company in Writ Petition No. 24339 of 1989. Therein the workers or their Union were not impleaded. This Court passed an interim order dated 16.6.1989 staying arrest of Directors of Company but no interim order was passed in respect of notification issued by State Government. The Additional Labour Commissioner issued show-cause notice to Company directing to make payment of wages to concerned workmen under Section 3 of Act, 1978 and/or to show-cause by appearing on 27.12.1990 as to why recovery proceedings for Rs. 19,41,297.72 be not initiated against it. Thereafter the Additional Labour Commissioner issued recovery certificates under Section 3 of Act, 1978 on 21.12.1990 for Rs. 19,41,297.72. Pursuant whereto, the citations were issued by Revenue Authorities on 21.6.1991. The Company filed Writ Petition No. 29764 of 1991 challenging recovery certificates. This Court passed an interim order staying recovery certificate on 1.11.1991 to the following effect: “Until further orders further proceedings of recovery in pursuance of the citation dated 21.6.91 shall remain stayed.” 6. In both these writ petitions petitioner-Union was not a party. It filed application for impleadment in Writ Petition No. 24339 of 1989, which was allowed on 16.2.2005. Similarly, in Writ Petition No. 29764 of 1991 the petitioner’s impleadment was allowed on 20.2.2007. Writ Petition No. 24339 of 1989 was dismissed on 18.7.2007 and Writ Petition No. 29764 of 1991 was dismissed as withdrawn on 5.2.2009 by allowing withdrawal application filed on behalf of company. 7. In the meantime it appears that Company has also gone to Board for Industrial & Financial Reconstruction (hereinafter referred to as the “BIFR”) and its case was registered as 81/90.
7. In the meantime it appears that Company has also gone to Board for Industrial & Financial Reconstruction (hereinafter referred to as the “BIFR”) and its case was registered as 81/90. The scheme for revival was sanctioned by BIFR under Section 18(4) of Sick Industrial Companies (Special Provisions) Act, 1985 (hereinafter referred to as the “Act, 1985”) on 12.11.2002 and it was monitoring the matter. On 4.6.2008 on certain aspects hearing took place and BIFR passed an order in which the directions issued to Company was as under: “(g) The company/promoter(s) would also ensure settlement/payment of the outstanding dues of the worker(s)/employees, as may be there as per provisions of the sanctioned scheme, without any further delay.” 8. It appears that petitioner-Union also sought to intervene before BIFR and in regard to petitioner-Union the direction contained in Clause (c) of the order dated 4.6.2008 was as under: “(c) ‘J.K. Cotton Mill Karamchari Audyogik Utpadak Sahakari Samiti’ (JKCMKAUSS) would furnish documentary evidece(s) towards registration/recognition of JKCMKAUSS issued by the concerned authority to the Board, failing which, the Board may not issue any notice to them in r/o the Board’s future hearing(s)/they may not be allowed to attend the Board’s future hearing(s).” 9. The State Government vide notification dated 24.10.2008 (Annexure-9 to the writ petition) withdrew its notification dated 19.12.1990. This withdrawal was from the date of issuance of notification dated 24.10.2008. The Additional Labour Commissioner thereafter withdrew the recovery certificate issued by him under Section 3 of Act, 1978 vide order dated 31.12.2008. Bringing on record the facts relating to proceedings of BIFR and its order dated 4.6.2008 the petitioner has also challenged the order dated 4.6.2008 passed by BIFR and has sought a writ of certiorari for quashing the same. It has also sought a writ of certiorari for quashing the State Government’s notification dated 24.10.2008 whereby the lock out notification was withdrawn. 10. Learned counsel for the petitioner contended that Additional Labour Commissioner has no power to withdraw a recovery certificate issued under Section 3 of Act, 1978 as it amounts to power of review, which has not been conferred under the statute. The order withdrawing recovery certificate passed by Additional Labour Commissioner, she urged, is patently without jurisdiction.
10. Learned counsel for the petitioner contended that Additional Labour Commissioner has no power to withdraw a recovery certificate issued under Section 3 of Act, 1978 as it amounts to power of review, which has not been conferred under the statute. The order withdrawing recovery certificate passed by Additional Labour Commissioner, she urged, is patently without jurisdiction. It is further contended that the BIFR has no jurisdiction to pass orders having impact with respect to payment of wages to the extent they adversely affect the workers and to that extent the orders passed by BIFR are liable to be modified/set aside. 11. Sri V.B. Singh, learned Senior Advocate, though did not complete his argument in the circumstances as already noticed above but whatever argument he could advance on 25.8.2014, the sum in substance thereof is that lock out declared illegal by State Government was subsequently withdrawn by employer, the employer have settled the matter substantially with workers and petitioner-Union is not a recognized union by the employer having only a handful of the workers, i.e., 2, 3 or 4 as members of union and, therefore, it has no locus standi to maintain the above writ petition. He further submitted that in respect of wages since the employer has already got matter settled with most of the workers, therefore, the Additional Labour Commissioner has rightly withdrawn recovery certificate. 12. So far as locus standi of petitioner is concerned, once it is not in dispute that even a single workman is member of petitioner-union and is adversely affected by the order passed by Additional Labour Commissioner withdrawing recovery certificate, petitioner-union has cause of action to spouse the cause of such member and it cannot be said that it has no locus standi whatsoever. Therefore, the objection raised on behalf of employer, I find lacks substance and has to be rejected. 13. Now coming to the substantial aspect, the first question which is to be considered by this Court is, whether recovery certificate issued by Additional Labour Commissioner, under Section 3 of Act, 1978 could have been withdrawn by it when recovery has not been made by Collector at all. 14. The recovery certificates are issued under Section 3 of Act, 1978, which reads as under: “3.
14. The recovery certificates are issued under Section 3 of Act, 1978, which reads as under: “3. Recovery of wages in certain industrial establishments as arrear of land revenue.—(1) Where the Labour Commissioner is satisfied that the occupier of an industrial establishment is in default of payment of wages and that the wage bill in respect of which such occupier is in default exceeds fifty thousand rupees, he may, without prejudice to the provisions of Section 5 and 6, forward to the Collector, a certificate under his signature specifying the amount of wages due from the industrial establishment concerned. (2) Upon receipt of the certificate referred to sub-section (1), the Collector shall proceed to realise, from the industrial establishment, the amount specified therein, besides recovery charges at the rate of ten per cent, as if such amount were an arrear of land revenue. (3) The amount realised under sub-section (2) shall, after deducting the recovery charges, be placed at the disposal of the Labour Commissioner who shall disburse the same or cause it to be disbursed among the workmen entitled thereto. (4) Where the amount so realised falls short of the wages-bill in respect of which the occupier has been in default, the Labour Commissioner may arrange for disbursement of such proportion or respective proportions of the wages due to various categories of workmen as he may think fit. (5) The liability of the occupier towards each workmen in respect of payment of wages, shall, to extent of the amount paid to such workman under this section stand discharged.” 15. Before issuing recovery certificate the statute requires an inquiry to be made by Labour Commissioner with regard to amount of default on payment of wages and it is empowered to issue recovery certificate only when the amount of default in payment of wages exceeds fifty thousand. For the purpose of this inquiry the Labour Commissioner possesses certain powers which can be exercised by Civil Court by virtue of Section 4 of Act, 1978. It reads as under: “4.
For the purpose of this inquiry the Labour Commissioner possesses certain powers which can be exercised by Civil Court by virtue of Section 4 of Act, 1978. It reads as under: “4. Powers of Labour Commissioner.—For the purposes of ascertaining the wages-bill of an establishment in respect of which default has been committed the Labour Commissioner shall have all the powers of a Civil Court, while trying a suit, under the Code of Civil Procedure, 1908 in respect of enforcing the attendance of witnesses and examining them on oath compelling the production of documents and shall be deemed to be a Civil Court for the purpose of Section 195 and Chapter XXVI of the Code of Criminal Procedure, 1973.” 16. However, Rule 4 of U.P. Industrial Peace (Timely Payment of Wages) Rules, 1981 (hereinafter referred to as the “Act, 1981”) also lays down procedure for ascertainment of wage and it reads as under: “4. Ascertainment of wage bill—(1) On receipt of information about the default of payment of wages exceeding fifty thousand rupees in an industrial establishment, the Labour Commissioner shall serve a notice on its occupier in Form-II for the purposes of ascertaining the wage bill in respect of which default in payment has been committed. The Labour Commissioner may also require the occupier to furnish to him the information in Form-III and to produce such other information and material he may consider necessary for the above purpose. (2) The Labour Commissioner shall forward to the Collector a certificate in Form-IV under his signature specifying the amount of wages due from the industrial establishment concerned. (3) The amount realised by the Collector and placed at the disposal of the Labour Commissioner shall be disbursed by the Labour Commissioner himself or he may cause it to be disbursed through the occupier of the concerned industrial establishment among the workmen entitled thereto. The account of the amount, so disbursed among the workmen, shall be maintained in Form-V by the Labour Commissioner or the occupier of the concerned industrial establishment, as the case may be, and where the amount is disbursed by the Labour Commissioner, himself, a copy of the same shall be forwarded to the occupier of the industrial establishment concerned.” 17.
The account of the amount, so disbursed among the workmen, shall be maintained in Form-V by the Labour Commissioner or the occupier of the concerned industrial establishment, as the case may be, and where the amount is disbursed by the Labour Commissioner, himself, a copy of the same shall be forwarded to the occupier of the industrial establishment concerned.” 17. From a bare perusal of Act, 1978 and Rules 1981 it is evident that procedure followed by Additional Labour Commissioner in making inquiry for ascertainment of default in payment of wages and its quantum, he has to undergo an inquiry by giving opportunity to employer and, therefore, the ascertainment of amount of default of wages is a quasi judicial power exercised by Additional Labour Commissioner. The amount ascertained by Additional Labour Commissioner for which recovery certificate is issued, therefore, is an order passed by Additional Labour Commissioner in exercise of quasi judicial powers which confers certain rights upon the workmen and obligation upon the employer or occupier of the industrial establishment. Once ascertainment of wage bill is arrived and thereafter recovery certificate is issued under the statute, the Additional Labour Commissioner has no power to interfere therewith and it is thereafter the obligation of Collector to proceed further and recover the amount of recovery certificate from the employer so that it should be paid to the workers. 18. In the present case, initially recovery could not be proceeded for the reason that an interim order was passed by this Court in a writ petition filed by employer, but the said writ petition having been dismissed for whatever reason, whether as withdrawn or otherwise, the fact remains that recovery certificate remains operative and stand valid even till date, having not been touched by this Court in any manner. There is no power of review or recall conferred upon Commissioner under Act, 1978 or Rules, 1981 so as to permit the Labour Commissioner to recall the recovery certificates already issued by him. 19. To my mind, the scheme of statute makes it very clear that once a recovery certificate is issued by Labour Commissioner, it is then the statutory responsibility of Collector to proceed further and execute recovery certificate and recover the amount from employer. It is evident from Section 3(2) of Act, 1978.
19. To my mind, the scheme of statute makes it very clear that once a recovery certificate is issued by Labour Commissioner, it is then the statutory responsibility of Collector to proceed further and execute recovery certificate and recover the amount from employer. It is evident from Section 3(2) of Act, 1978. The role of Labour Commissioner would come again only when amount realized from employer is remitted to Labour Commissioner who thereafter will have to disburse the recovered amount amongst the workers entitled for such payment and to maintain requisite account in Form V. If the amount is not disbursed by Labour Commissioner himself, but by the employer, the appropriate record shall be maintained by employer. The scheme, therefore, makes it very clear that recovery certificate once issued, the Labour Commissioner thereafter become functus offitio so far as recovery certificate is concerned and the only statutory duty of Labour Commissioner is with regard to disbursement of recovered amount and not to touch or tinker with recovery certificates in any manner. I have no manner of doubt that Additional Labour Commissioner, in the case in hand, has clearly acted wholly without jurisdiction in issuing order dated 31.12.2008 (Annexure-11 to the writ petition) by withdrawing the recovery certificate already issued under Section 3 of Act, 1978. 20. Learned counsel appearing for employer, could not place any provision or binding authority before this Court so as to pursue this Court to take a different view. 21. So far as the orders passed by BIFR as concerned, this Court found that the orders of BIFR are in exercise of a special statute, i.e., Act, 1985 and thereagainst a statutory remedy lies by way of appeal under Section 25 of Act, 198. The petitioner-Union was a party before BIFR and I do not find that this Court would be justifying in interfering with the orders passed by BIFR since remedy, if any, is available to petitioner under the provisions of Act, 1985. To this extent, therefore, I am not inclined to interfere with the orders passed by BIFR. 22. In the result, the writ petition is allowed in part. The order dated 31.12.2008 passed by Additional Labour Commissioner withdrawing recovery certificates issued under Section 3 of Act, 1978, is hereby quashed. With respect to proceedings of BIFR and various orders passed by it, the writ petition is dismissed on the ground of alternative remedy.
22. In the result, the writ petition is allowed in part. The order dated 31.12.2008 passed by Additional Labour Commissioner withdrawing recovery certificates issued under Section 3 of Act, 1978, is hereby quashed. With respect to proceedings of BIFR and various orders passed by it, the writ petition is dismissed on the ground of alternative remedy. 23. There shall be no order as to costs. ——————