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2025 DIGILAW 308 (AP)

Kurapati Steeven v. Managing Director

2025-02-19

HARINATH.N

body2025
ORDER : (HARINATH N., J.) 1. The petitioners are challenging the common order dated 28.08.2014 passed in MP.No.70 of 2002 and batch passed by the Central Government Industrial Tribunal-Cum-Labour Court, Hyderabad, to the extent of dismissing the petitioners’ claim against the 1 st respondent only and also seeking a consequential direction to direct the 1st respondent also to pay the amounts as claimed in the MPs. 2. The petitioners joined the 1 st respondent-company in various posts on various dates. The service of the petitioners in the 1 st respondent-company was not in dispute, as such, it is suffice to mention that the petitioners were employees of the 1 st respondent from the date of their joining till 16.12.1989, the date on which an agreement of sale was entered by the 1 st respondent with M/s.Fraser Investment Limited (HMP Group). The said agreement related to purchase of the Cement Factory at Tadepalli and Mines at Seetaramapuram. The 1 st respondent was transferred to Fraser Investment Limited. The name of Kistna Cement Works was changed as HMP Cements Limited.The factory at Tadepalli was transferred to Kistna Cements Limited. 3. A lockout was declared by the 3 rd respondent on 29.05.1993.The Government of Andhra Pradesh issued GORt.No.1178, dated 25.06.1993, prohibiting the continuance of lockout and referred the matters for adjudication to the Labour Court – Cum – Industrial Tribunal. The 3 rd respondent filed WP.No.9101 of 1993, which was allowed on 22.02.1995. The Government issued GORt.No.722, dated 22.07.1995, prohibiting the continuance of lockout in the 3 rd respondent-factory. The 3 rd respondent filed WP.No.19847 of 1995 before this Court challenging the issuance of GORt.No.722, dated 22.07.1995. This Court declined to interfere with the issue, and the writ petition was closed. 4. The learned counsel for the petitioners submits that the lockout declared by the 3 rd respondent is in violation of Section 25(O) of the ID Act. The petitioners sought wages from the date of lockout, and a batch of MPs came to be filed, which were adjudicated by the 4 th respondent. 5. The respondents 2 and 3 filed IA.No.46 of 2004 before the 4 th respondent challenging the maintainability of the claim of the petitioners under Section 33(2) of the ID Act. The CentralIndustrial Tribunal allowed the IA.No.46 of 2004 dismissed the claims of the petitioners. 6. The petitioners filed WP.No.22999 of 2006, challenging the dismissal of claim petitions. 5. The respondents 2 and 3 filed IA.No.46 of 2004 before the 4 th respondent challenging the maintainability of the claim of the petitioners under Section 33(2) of the ID Act. The CentralIndustrial Tribunal allowed the IA.No.46 of 2004 dismissed the claims of the petitioners. 6. The petitioners filed WP.No.22999 of 2006, challenging the dismissal of claim petitions. This Court vide order dated 24.07.2008 directed the Central Industrial Tribunal to adjudicate the issue on merits and pass necessary orders. The 4 th respondent allowed the claim of the petitioners; however, dismissed the claim of the petitioners against the 1 st respondent and fastened the liability of payment on respondent Nos.2 and 3. The learned counsel for the petitioners submits that the 1 st respondent is also equally, jointly and severally liable along with respondents 2 and 3 for payment of wages to the petitioners. 7. The learned counsel appearing for the petitioners submits that the manner in which the property of the 1 st respondent was transferred is completely alien to the provisions of the Transfer of Property Act. It is submitted that the said transaction is a sham transaction and that the respondents 1 to 3 have connived with each other to ensure the petitioners do not get their dues from the respondent No.1. 8. It is also submitted that the Labour Court has adone the role of a Civil Court in deciding the ownership and title of the parties over the assets of the industry. It is also submitted that there is novalid sale transaction between respondents 1 and 2 and that the 2 nd respondent was only acting as an agent of the 1 st respondent. 9. The learned counsel for the petitioners further submits that the Ex.M3 (the agreement of sale dated 16.12.1989) is marked subject to objection. As per the said agreement, 21.02.1990 is the date of the takeover. All the employees employed by the 1 st respondent were taken over by the 3 rd respondent and that the purchasers shall have full and unfettered right of management of the 3 rd respondent. 10. The learned counsel for the petitioners further submits that as Ex.M3 was not adequately stamped, the same ought to have been impounded, and the Tribunal ought to have discarded Ex.M3. It is also submitted that Ex.M3 was brought into existence to evade the liability of the 1 st respondent. 10. The learned counsel for the petitioners further submits that as Ex.M3 was not adequately stamped, the same ought to have been impounded, and the Tribunal ought to have discarded Ex.M3. It is also submitted that Ex.M3 was brought into existence to evade the liability of the 1 st respondent. The learned counsel for the petitioners submits that the 1 st respondent is also liable for payment of wages of the petitioners. The learned counsel for the petitioners places reliance on Suraj Lamp & Industries Pvt.Ltd. Vs. State of Haryana & Anr. , [ AIR 2012 SC 206 ] , the Hon’ble Supreme Court held that transfer of immovable property has to be essentially by way of a registered sale deed. It is submitted that the manner inwhich the 3 rd respondent assets were taken over is completely alien to the law and also contrary to the law laid down by the Hon’ble Supreme Court in the matter of Suraj Lamp and Industries case. The learned counsel for the petitioners also places reliance on the judgment of Hon’ble Supreme Court in the matter of Sanjay Sharma Vs. Kotak Mahindra Bank Limited , Civil Appeal No. SLP(C) No.330 of 2017, decided on 10.12.2024 wherein the Hon’ble Supreme Court held that sale by public auction cannot be set aside until there is any material irregularity and/or illegality committed in holding the auction or if such auction was vitiated by any fraud or collusion. The learned counsel for the petitionrs also places reliance on Gurmail Singh and others Vs. State of Punjab and others , (1991) 1 SCC 189 the Hon’ble Supreme Court held that even before the insertion of Section 25FF of the ID Act the employees of predecessor had no right to claim reemployment by the successor in business in sale by the exceptional circumstances. The discretion given to Industrial Courts is no longer generally available because of the insertion of Section 25FF of the ID Act. But in a case where one of both the parties is a state instrumentality, having obligations under the constitution, the Court has a right of judicial review over all aspects of transfer of the undertaking. It is open to the Court togive appropriate directions to ensure that no injustice results from the changeover. But in a case where one of both the parties is a state instrumentality, having obligations under the constitution, the Court has a right of judicial review over all aspects of transfer of the undertaking. It is open to the Court togive appropriate directions to ensure that no injustice results from the changeover. The learned counsel for the petitioners also places reliance on the judgment of this Court in the matter of Chintam Kantam Vs. Dhulipudi Venkateswara Rao , AndhWR – 2004 –1–142 held that levy of stamp duty and penalty is always in relation to the document which is to be marked before the Court and as such levy cannot depend upon the pleadings of the parties. 11. The learned counsel for the petitioners submits that the 1 st respondent is equally responsible for payment of the dues of the workmen and the manner in which the respondents 1 to 3 have connived with each other and created a document styling it as the agreement of sale cannot escape the liability of the workmen. 12. Ms. G.Sudha, learned counsel appearing for the 1 st respondent virtually online, submits that the petitioner has arraigned several other petitioners without any basis and claims to be espousing the cause of other workmen without any authority. The 1 st respondent transferred the unit being run as Kistna Cement Works to Fraser Investment Limited, and from 16.12.1999, under the sale agreement, the unit was transferred as a running factory along with all employees and also transferred the leasehold rights of Seetarampuram Mines. 13. It is further submitted that the petitioners were given continuous service by the 2 nd respondent, and their service continued till the declaration of lockout. It is submitted that the 1 st respondent is no way concerned with the payment of wages or extension of any service benefits to the petitioners from the date of agreement of sale i.e., 16.12.1989. The 2 nd respondent has taken the responsibility of all workmen, including the petitioners. As such, the 1 st respondent is a non-entity in so far as the claim of the petitioners is concerned. The 1 st respondent is also equally not responsible or answerable for the events which transpired on account of the declaration of lockout. It is the respondent Nos.2 and 3 who have taken forward the subsequent proceedings in pursuance of the lockout before the various legal forums. The 1 st respondent is also equally not responsible or answerable for the events which transpired on account of the declaration of lockout. It is the respondent Nos.2 and 3 who have taken forward the subsequent proceedings in pursuance of the lockout before the various legal forums. The 1 st respondent was neither made a party in such proceedings nor was called upon by any Court of law or any other statutory authority to submit their point of view on the validity or otherwise of the lockout declared by the 3 rd respondent. 14. It is further submitted that the petitioners, having accepted the employment with the respondents 2 and 3 and worked at the beck and call of the respondents 2 and 3 cannot turn around and claim that the 1 st respondent is responsible or liable for payment of wages from the date of declaration of lockout. It is submittedthat the proceedings initiated by the petitioners for recovery of dues are underway and pending disposal. It is also submitted that the 1 st respondent is no way concerned or responsible in any manner for addressing the grievance of the petitioners claiming their alleged dues. It is further submitted that the Labour Court has gone into all the issues and also considered the various documentary evidence and thus rightly dismissed the claim of the petitioners against the 1 st respondent. 15. Heard the learned counsel for the petitioners and the learned counsel appearing for the 1 st respondent and perused the material on record. Consideration of the Court : 16. The Labour Court passed a common order and disposed off 520 miscellaneous petitioners filed under Section 33(c)(2) of the ID Act. The 2 nd respondent filed an application challenging the maintainability of the petitions and the Labour Court vide order dated 18.09.2006 held that the petitions were not maintainable. The petitioners filed WP.Nos.27006 and 22999 of 2006 and this Court set aside the orders and restored the petition to file. The contentions of the petitioners and the respondents were considered by the Labour Court and gave a categorical finding that the petitioners are all workmen and that all the petitionershave the pre-existing right to claim wages and other benefits from their employer. 17. The contentions of the petitioners and the respondents were considered by the Labour Court and gave a categorical finding that the petitioners are all workmen and that all the petitionershave the pre-existing right to claim wages and other benefits from their employer. 17. The Labour Court also dealt with the issue of who among the respondents 1 to 3 has to be considered as an employer of the petitioners at the relevant point of time, i.e., May, 1993. The Labour Court, after having gone into the evidence, has held that the petitioners willingly worked for the changed management, i.e., the 2 nd respondent and the 2 nd respondent transferred the industry to the 3 rd respondent. The Labour Court has also considered the evidence on record, which disclosed that the VRS Scheme was introduced and some workmen opted for the said scheme and that some of the workmen, including some petitioners, got refund of their Employees Provident Fund amount and the representative of the 3 rd respondent alone signed such forms. On this premise, the Labour Court has held that respondents 2 and 3 are employers of the petitioners. The Labour Court also held that in so far as the claim of the workmen is concerned, the same has to be considered in terms of Section 25FF of the ID Act, 1947. The Labour Court has also considered the proceedings before the Debt Recovery Tribunal, Calcutta, by judicial proceedings has sold away the assets of the Industry to the 3 rd party in an auction held for recovering the dues to abanking organization from the respondents 2 and 3. It is also pertinent to mention that the 1 st respondent had no claim, interest, right or lien over the assets which were put to auction and, as such, did not participate in the auction nor protested the auction. Thus, the 1 st respondent remained aloof with the affairs of the respondents 2 and 3 after 16.12.1989. The finding of the Labour Court is based on well-considered grounds and also on a sound reasoning. The Labour Court has rightly protected the claim of the workmen and directed payment of the legitimate dues due payable to the petitioners from the appropriate and concerned respondents. This Court finds no infirmity or illegality in the impugned proceedings challenged in the writ petition, and accordingly, the writ petition is dismissed. 18. The Labour Court has rightly protected the claim of the workmen and directed payment of the legitimate dues due payable to the petitioners from the appropriate and concerned respondents. This Court finds no infirmity or illegality in the impugned proceedings challenged in the writ petition, and accordingly, the writ petition is dismissed. 18. In the result, the writ petition is dismissed without costs. 19. As a sequel, pending miscellaneous petitions, if any, shall stand closed.