Research › Search › Judgment

Karnataka High Court · body

2016 DIGILAW 896 (KAR)

T. VENKATESH v. BANGALORE TURF CLUB LTD.

2016-11-24

JAYANT PATEL, P S DINESH KUMAR

body2016
ORDER : As both the group of matters arise from the common judgment and the order passed by the learned Single Judge, they are being considered simultaneously. 2. We may record that W.A.Nos.1643-1650/2015 and 1952/2015 are preferred by the workmen (hereinafter referred to as the workmen for the sake of convenience) against the order passed by the learned Single Judge dated 20.04.2015 in their respective writ petitions, whereby the learned Single Judge for the reasons recorded has dismissed the petitions. Whereas W.A.Nos.2438/2015 and allied matters have been preferred by the employer/Management against the order passed by the learned Single Judge, whereby the learned Single Judge has also dismissed the writ petitions preferred by the Management. 3. The net effect of the order of the learned Single Judge is that the award passed by the Labour Court whereby the benefits were ordered to be paid to the workmen notionally on the basis of their length of service as per the Voluntary Retirement Scheme of 2004 is not interfered. 4. We have heard the learned Counsel appearing for both the sides for final disposal. 5. The short facts of the case appear to be that the workmen were working with the employer on their respective posts in the Printing and Transport Department/Section. On 04.02.2001, the employer introduced the scheme of Voluntary Retirement Scheme. As per the employer, large number of workmen working in the respective Section opted for Voluntary Retirement Scheme. However, the workmen in question did not opt for Voluntary Retirement Scheme. On 16.09.2001 the employer issued closure notices to close down the department of Printing and Transport. A dispute was raised under the Industrial Disputes Act (herein after referred to as the Act), which ultimately referred it to the Labour Court for adjudication. 6. The Labour Court initially passed the award on 24.2.2004 upholding the closure and also the order of termination. However, the Labour Court directed the employer/management to pay the benefits of Voluntary Retirement Scheme of the year 2001 (hereinafter referred to as ‘VRS 2001’ for the sake of brevity) along with the interest at the rate of 10% per annum. The employer as well as workmen filed petitions challenging the award passed by the Labour Court. So far as the petitions of the workmen are concerned, they were numbered as W.P.No.19417/2004 and allied matters and employer’s petitions were numbered as W.P.No.27454/2004 and allied matters. The employer as well as workmen filed petitions challenging the award passed by the Labour Court. So far as the petitions of the workmen are concerned, they were numbered as W.P.No.19417/2004 and allied matters and employer’s petitions were numbered as W.P.No.27454/2004 and allied matters. In those petitions, on 5.1.2009, the learned Single Judge passed an order modifying the award of the Labour Court and directed the employer to notionally fix the pay of the petitioners as if they had continued in service till the year 2004 and further directed to extend the benefit of VRS in the scheme of 2004 (hereinafter referred to as ‘VRS 2004’ for the sake of brevity). The matters were carried in appeal by the workmen as well as by the employer being W.A.No.376/2009 and allied matters as well as W.A.No.304/2009 and allied matters respectively. On 8.4.2009, the Division Bench of this Court in the said appeals gave liberty to the workmen to accept the benefit of VRS 2001 subject to the right in the appeals including that of entitlement of the benefit as per VRS 2004. It is an undisputed position that on 21.5.2009, pursuant to the aforesaid Interim Order in the appeals, the benefits of the workmen as per VRS 2001 were disbursed and paid. Thereafter, the aforesaid appeals came up for consideration before the Division Bench of this Court and vide Judgment dated 11.11.2009, the Division Bench of this Court remanded the matter to the Labour Court to find out as to whether closure was sham or otherwise. 7. The Labour Court took up the matter pursuant to the directions of this court in the above writ appeals and ultimately vide award dated 17.3.2010 found that the closure was not sham or bogus, but was genuine. However, the Labour Court directed the employer to extend the benefit of VRS 2004 by notionally reckoning the length of service upto 2004 so as to enable them to get the benefit of VRS 2004. Once again, the workmen as well as the management/employer filed writ petitions challenging the aforesaid award of the Labour Court. The aforesaid writ petitions were simultaneously heard by the learned Single Judge and the learned Single Judge passed the impugned order on 20.4.2015. Under the circumstances, the present appeals are filed before this Court. 8. Once again, the workmen as well as the management/employer filed writ petitions challenging the aforesaid award of the Labour Court. The aforesaid writ petitions were simultaneously heard by the learned Single Judge and the learned Single Judge passed the impugned order on 20.4.2015. Under the circumstances, the present appeals are filed before this Court. 8. As we have already recorded earlier that against the very judgment in the order of the learned Single Judge, there are cross appeals namely, workmen have filed the appeals as well as the management has also filed the appeal. But as both arise from the common order passed by the learned Single Judge, they have been considered simultaneously. 9. We have heard Mr.M.Narayana Bhat, learned Counsel appearing for the workmen and Mr.C.K.Subramanya, learned Counsel appearing for the employer in the respective appeals. 10. Learned Counsel for the workmen contended that Section 25-F would apply even in case of closure under Section 25-FFF of the Act. He submits that once Section 25-F of the Act is made applicable, the termination would hold as retrenchment. Simultaneously, there will be applicability of Sections 25-G and 25H of the Act namely., maintaining seniority and following the principle of ‘Last-cum-First-go’. If neither the seniority is maintained nor the principle of ‘Last-cum-First-go’ is applied at the time of termination and if the retrenchment compensation is not paid, it would be an illegal termination and resultantly, the workman would be entitled to not only reinstatement but also full backwages. As per the learned Counsel, the Labour Court has failed to consider the said aspect and even the learned Single Judge has also not properly appreciated the said aspect and therefore this Court may consider in the present appeals. 11. In addition to the above, learned Counsel for the workmen contended that if the termination is declared as illegal, the workmen would be entitled to full backwages minus the amount already paid as per VRS 2001 since the payment of VRS 2001 was subject to the order passed in the appeals. He alternatively contended that even if the award of the Labour Court is maintained, the appellants-workmen would be entitled to the difference of the amount as per VRS 2004. He alternatively contended that even if the award of the Labour Court is maintained, the appellants-workmen would be entitled to the difference of the amount as per VRS 2004. He lastly contended that in the event it is found by this Court that the workmen would be entitled to only VRS 2001, then also, the fact remains that the workmen were paid the amount of VRS 2001 in the year 2009 i.e., on 21.5.2009 and hence, they would be entitled to the reasonable interest on compensatory basis as the amount was enjoyed by the management and the workmen were deprived of the said amount for a period of about 8 years. He therefore submitted that this Court may interfere with the award passed by the Labour Court and may grant the relief as prayed in the writ petitions. 12. Whereas, the learned Counsel appearing for the employer/management contended that there was a limited remand to the Labour Court by the earlier order of the Division Bench in the writ appeals to find out as to whether the closure was sham or bogus or genuine. The Labour Court has recorded the finding in favour of management. Once, closure is found to be genuine or not sham or bogus, the workmen would only be entitled to the benefit of compensation as provided under Section 25-FFF of the Act. But, instead that the Labour Court has directed in the award to extend the benefits to the workmen as per VRS 2004. He submitted that even if it is considered that the workmen were entitled to the benefit of VRS 2001 on par with the other employees, then also, the amount as per VRS 2001 was already paid pursuant to the Interim Order passed in the earlier writ appeals and there was no reason for the Labour Court to further extend the benefit as per VRS 2004. He submitted that since the management was also aggrieved by the order and the award of the Labour Court, writ petitions were preferred. But, the learned Single Judge had not properly considered the aforesaid aspects and hence, this Court may consider in the present appeals. 13. It does appear that the earlier order passed in the writ appeals dated 11.11.2009 was on a limited point as to whether the closure was sham or otherwise. But, the learned Single Judge had not properly considered the aforesaid aspects and hence, this Court may consider in the present appeals. 13. It does appear that the earlier order passed in the writ appeals dated 11.11.2009 was on a limited point as to whether the closure was sham or otherwise. The Labour Court after undergoing the entire exercise of appreciation of the evidence of the witnesses on record and on facts found that the closure could not be said as sham or bogus but was genuine. The said finding of fact has again been examined by the learned Single Judge in the impugned order and the learned Single Judge has concurred with the finding of fact that the closure of Press Section and Vehicle Section was bonafide. Be it recorded that, the petition before the learned Single Judge was under Article 227 of the Constitution of India and even if it is considered as under Article 226 of the Constitution of India, then also, the finding of fact already recorded by the Labour Court and confirmed by the learned Single Judge in the impugned order would not fall for interference nor can be upset by this Court in an intra Court Appeal after re-appreciation of evidence on record as sought to be canvassed. Even otherwise also, it is not possible for us to accept the contention that such finding of fact is perverse to the record and the evidence before the Labour Court. Hence, the contention in this regard cannot be accepted. 14. The aforesaid would take us to examine as to whether Section 25-F of the Act would apply to a case when the closure is effected under Section 25-FFF of the Act. In our view, the said contention should not detain us further since the same is no more res integra and is covered by the decision of the Hon’ble Apex Court in the case of Isha Steel Treatment, Bombay v. Association of Engineering Workers, Bombay and others reported at 1987(1) LLJ 427 and more particularly, the observations made by the Hon’ble Apex Court at para 7. The relevant of which is reads as under: “…………The question of application of section 25-G of the Act arises only when the services of the workmen are retrenched. In Santosh Gupta Vs. The relevant of which is reads as under: “…………The question of application of section 25-G of the Act arises only when the services of the workmen are retrenched. In Santosh Gupta Vs. State Bank of Patiala (1980-II-LLJ-72) it is laid down that if the termination of service of a workman in a given case falls either under section 25-FF or under section 25-FFF the Act it would not be a termination falling under section 25-F of the act. this court has observed in that case that after the enactment of section 25-FF and section 25-FFF retrenchment included every kind of termination of service except those not expressly included in section 25-F or not expressly included in section 25-F or not expressly provided for by other provisions of the Act such as sections 25-FF and 25-FFF. Hence if the case is one of genuine closure then the question of applying section 25-G of the Act which is applicable to a case of retrenchment would not arise.” (sic) Under these circumstances, it is not possible for us to accept the contention that when the closure is effected under Section 25-FFF of the act, the provisions of Sections 25-F, 25-G and 25H would be applicable. 15. If the contention is further examined for the sake of consideration on the premise that the provisions of Section 25-F of the Act would apply, so as to treat the termination as retrenchment, then also the termination may result as illegal, but the matter does not end there because even if the retrenchment compensation is not paid (though it is case of the employer that they had forwarded the retrenchment compensation by cheque but the same was not accepted and rejected by the workmen), the fact remains that the respective section where the workmen were working are closed. Therefore, there would not be any question for reinstatement. By now, it is also a trend to apply principles of “No work, No wages”, when it comes up for awarding out backwages. Not only that the workmen claiming backwages would also be required to satisfactorily demonstrate that all attempts were made to get the employment but they failed or in any case he was not gainfully employed. After primary burden is discharged by the workmen, the burden may shift to the employer. In the present case, nothing is brought to our notice to show that such burden was discharged. After primary burden is discharged by the workmen, the burden may shift to the employer. In the present case, nothing is brought to our notice to show that such burden was discharged. Therefore, if the payment of backwages is not to be ordered and the reinstatement to the original position is not possible on account of the closure, the Court may be required to consider the aspect of lumpsum compensation in lieu of reinstatement. In the present case, the workman and other co-workman are already offered amount as per VRS 2001, hence there is no reason why the workmen in the present case should not be entitled to the benefit of VRS 2001, even if it is considered that lumpsum compensation in lieu of compensation is to be considered or the other lumpsum amount. Considering the peculiar facts and circumstances, we find that the matter can be considered in any case for the amount paid to other coworkers as per the scheme of VRS 2001 should be made available to the workmen in the present case as the lumpsum amount of compensation in view of the reinstatement. 16. The aforesaid aspect is coupled with the circumstance that as per Section 25-FFF of the Act, even if the closure has to be effected by the management, the compensation having calculated as per the scheme of Section 25-FFF of the Act was offered by the management as if the retrenchment compensation is payable under Section 25-F of the Act. The aforesaid is further coupled with the additional aspect that the Division Bench of this Court in the writ appeals as per the earlier order permitted the workmen to accept the amount as per VRS 2001 scheme. Under this peculiar circumstance, we find that in any case if one is to consider amount as the lumpsum compensation in lieu of backwages as well as reinstatement, it would not be in any case less than the amount as per VRS 2001, which is paid to other coworker by the management. 17. There is considerable force in the contention of the learned Counsel for the employer that the Labour Court once having found that the closure was not sham or otherwise but was genuine, the Labour Court could have restricted the relief to the extent of availability of the amount in VRS 2001. 17. There is considerable force in the contention of the learned Counsel for the employer that the Labour Court once having found that the closure was not sham or otherwise but was genuine, the Labour Court could have restricted the relief to the extent of availability of the amount in VRS 2001. There are no valid reasons recorded by the Labour Court for extending the benefit of VRS 2004 as if the workmen notionally continued in service upto the date of VRS 2004. No specific reasons are recorded even by the learned Single Judge in the impugned order except that the value of rupee has gone down. In our view, it cannot be a sufficient justification to notionally treat the workmen in service upto 2004 and to extend the benefit of VRS 2004. Hence, we find that the award passed by the Labour Court and non interference by the learned Single Judge so far as extending the benefit of VRS 2004 to the workmen cannot be sustained in the eye of law. Resultantly, the workmen would be entitled to the benefit of VRS 2001 only. 18. The aforesaid would lead us to examine an incidental aspect that the benefit given to the other co-workmen were paid as back as in the year 2001, whereas, the present workmen are paid benefit only on 21.5.2009. Should the workmen be awarded reasonable interest on compensatory basis for the period from 16.9.2001 to 21.5.2009 and if so, what could be the reasonable interest? 19. In our considered view, the fact remains that the amount of VRS 2001 which have been paid to all coworkers on the day fixed for VRS on 16.9.2001 has remained unpaid till 21.5.2009. The amount has remained with the employer and the employer can be said to have enjoyed the money for the period from 16.9.2001 to 21.5.2009. It can also be said that the workmen were deprived of the said amount of money during the said period. If the interest is to be awarded as the penal measure one may have to trace out as to whether there was any default or not, but if the interest is to be awarded by way of compensatory measure, in our view, the enjoyment of the money and deprivation of the money for the respective period would be a sufficient aspects and the default would be inconsequential. Hence, we find that the interest can be awarded by way of a compensatory measure considering the facts and circumstances of the case. When one talks for interest by way of compensatory measure, the normal practice would be to award interest at par with the bank rate interest prevailing from time to time. If one considers the period 2001 onwards in the beginning the rate of interest was very high and after a span of about 56 years, it has gone down. Therefore, we find that the average bank rate interest can be quantified at 8% p.a. and if the said yardstick is applied by way of compensatory measure, the workmen would be entitled to the interest at the rate of 8% p.a. on the amount as per VRS 2001 scheme for the period from 16.9.2001 to 21.5.2009. 20. We are conscious of the fact that the matter arose from the award of the Labour Court. In the judicial review, it would be limited to the subject before the Labour Court but at the same time, we do find that if the Labour Court could modulate the relief, such power are available even under Article 226/227 of the Constitution of India to do complete justice to the parties, more particularly, class of workmen, who are fighting the litigation all throughout but did not get the benefit of the amount as per VRS 2001 also. Hence, we find that it would be appropriate to award the interest at the rate of 8% p.a. by way of a compensatory measure. 21. In view of the aforesaid observations and discussion, the order passed by the learned Single Judge as well as the award passed by the Labour Court are modified to the extent that the workmen would be entitled to the benefit of the amount as per VRS 2001 scheme, but they shall also be additionally entitled to interest at the rate of 8% p.a. on the amount of VRS 2001 scheme from 16.9.2001 to 21.5.2009. The employer shall calculate the amount and pay the amount of interest to the workmen within a period of eight weeks from the date of receipt of certified copy of the order of this Court. 22. Both the group of appeals shall stand disposed of accordingly. Considering the facts and circumstances of the case, no order as to costs.