Village Pakari Nuniatola, PO & PS Lauria, Dist. W. Champaran v. The State Of Bihar

Patna High Court CWJC No.15934 of 2007 (8) dt.13-12-2012 Village Pakari Nuniatola, PO & PS Lauria, Dist. W. Champaran

#25. Rabindra Thakur Son of Late Shri Amhika Thakur resident of Village Belwa, PO & PS Lauria, Dist. W. Champaran

#26. Raghawsharan Thakur Son of Late Pashuram Thakur resident of Village Belwa, PO & PS Lauria, Dist. W. Champaran

#27. Ramesh Singh Son of Shri Satyanarayan Singh resident of Vilage Marahiya, PO & PS Lauria, Dist. W. Champaran

#28. Ramesh Yadav Son of Late Bijali Raut resident of Parroun, PO & PS Lauria, Dist. W. Champaran

#29. Nathu Chaudhary Son of Shukdeo Chaudhary resident of Pakari Nuniatola, PO & PS Lauria, Dist. W. Champaran

#30. Sudama Tiwary Son of Late Amardeo Tiwary resident of Village Turhapatti, PO Turhapatti Lalatola, PS Sirisia, Dist. W. Champaran 31. Md. Salim Son of Harif Dewan resident of Village Parron, PO & PS Lauria, Dist. W. Champaran

#32. Birendra Ahir Son of late Mangaroo Ahir resident of Vilage Parron, PO & PS Lauria, Dist. W. Champaran

#33. Dhruw Narayan Singh Son of Late Shamdeo Singh resident of Village Hasanpura, PO & PS Marhaora, Dist. Chapra, Saran

#34. Jagmohan Prasad Son of Late Mahadeo Sah resident of Village, PO & PS Lauria, Dist. W. Champaran

#35. Pramod Kumar Mishra Son of Shri Shiv Shankar Mishra resident of Village, PO & PS Lauria, Dist. W. Champaran

#36. Shailesh Kumar Mishra Son of Late Shri Kanhaiya Mishra resident of Village Akhwa Jamunia, PO Narkatiaganj, PS Shikarpur, Dist. W. Champaran

#37. Nawal Kishore Shukla Son of Late Jang Bahadur Shukla resident of Villae Lauria Mishra Tola, PO & PS Lauria, Dist. W. Champaran

#38. Shamlal Sharma Son of Late Nathuni Sharma resident of Village Lauria Mishra Tola, PO & PS Lauria, Dist. W. Champaran

#39. Rampujan Lal Son of Lajpati Lal resident of village Siswa Bujurg, PO Parsa Station, PS Shoharat garh, Dist. Sidharth Nagar (UP)

#40. Prem Kumar Srivastava Son of Sri Jang Bahadur Lal Srivastava resident of Village & Mohalla Brahmchari, PO & PS Menhadawal, Dist. Sant Kabir Nagar (UP)

#41. Rameshwar Ahir Son of Late Prasad Ahir resident of Village Parron, PO & PS Lauria, Dist. W. Champaran

#42. Rajbanshi Yadav Son of late Muneshwar Yadav resident of Village and PO Ojha Barwa, P.S. Sanichari (Jogawri), Dist. W. Champaran .... .... Petitioners Versus 1. The State Of Bihar through the Chief Secretary, Government of Bihar, Patna

#2. The Secretary, Department of Sugarcane Development, Government of Bihar, Patna

#3. SBI Caps, Financial Advisor, Department of Sugarcane Development, Government of Bihar, Patna .... .... Respondents ====================================================== Appearance : For the Petitioner/s : Mr. Alok Kumar Sinha, Advocate Patna High Court CWJC No.15934 of 2007 (8) dt.13-12-2012 Mr Indrajeet Bhushan, Advocate Mr. Manish Kumar, Advocate For the Respondent/s : Mr. Yogendra Prasad Sinha, AAG 5 ====================================================== CORAM: HONOURABLE MR. JUSTICE AJAY KUMAR TRIPATHI CAV ORDER 8

13.12-2012 Petitioners are employees of what was known as Lauria Distillery. No doubt, this Distillery was in private hands, owned and run by SKG Sugar Limited, which later on came to be known as SKG Consolidated Limited. The property passed into the hands of the State of Bihar after the judgment of the Hon‟ble Apex Court, rendered on 18.2.2003 in the case of Shri Krishna Gyanoday Sugar Limited and another v. State of Bihar, reported in 2003 (4) SCC 378. It is the stand of the petitioners that by virtue of the judgment of the Hon‟ble Apex Court in the abovementioned case, the petitioners became employees of the company under the State as the Distillery along with the Sugar Mill vested in the State, by virtue of Bihar Sugar Undertakings (Acquisition) Act, 1976. The Act was to provide for acquisition and transfer of certain Sugar undertakings in the State of Bihar and for matters connected therewith or incidental thereto as per the provision of Section 3 of the Act. The undertakings listed in the schedule stood transferred to and vested in the Government of Bihar or a Corporation, which Patna High Court CWJC No.15934 of 2007 (8) dt.13-12-2012 could be formed, with all the assets, liabilities, rights, titles, interest and obligation including any mortgage, charge of any other encumbrance, lien, trust of similar obligation attached to the undertakings. There was protracted litigation originating at the High Court and traveling to the Apex Court on the validity of the Act 1976 which was upheld. We are concerned in the present case as to the implication and the fall out of the judgment of the Hon‟ble Supreme Court in the case of Shri Krishna Gyanoday Sugar Limited (supra) and the implication thereof for the present petitioners, who are demanding payment of their wages and to be treated alike to the employees of the Sugar Mill or Mills which were taken over. There are significant findings which have been given by the Hon‟ble Supreme Court in paragraphs 27 and 28 of the said judgment, which has a direct nexus to the issue which has been argued at the Bar in the above case. A question was raised by the erstwhile company whether the Distillery was part and parcel of the Sugar Mill and whether the Distillery vested in the State by virtue of the Acquisition Act or it was a distant entity. Patna High Court CWJC No.15934 of 2007 (8) dt.13-12-2012 This Court cannot place the matter any higher or better than in the words of what the Apex Court had to say. Paragraphs 27 and 28 are reproduced herein below: including a “27. The impugned Act seeks to take over the sugar undertakings 'distillery' operated in such undertaking. What is urged before us comes in the teeth of S. 4(4)(ii)(e) and if we correctly understand the scope of this provision, the arguments advanced on behalf of the parties can be truly appreciated and, for that purpose, it is necessary to set out that provision in full which is as follows :- "Section 4. Certain consequences of vesting.- (4)(ii) For removal of doubts. It is hereby declared that, save as otherwise expressly provided in this section or in any other section of this Act.- (e) Notwithstanding any provision in any other law, all the transfer, disposition of properties moveable or immoveable either in part or in whole made after 29th October, 1978 of the scheduled undertaking shall be invalid and stand annulled. The Collector shall take possession of such properties with undertaking." the properties of

#28. Section 4 falls into different parts. The first part is covered by an non obstante clause by which the properties along with encumbrances and to what extent vest in the State and clause (4)(i) covers such a situation. But clause 4(ii) opens with a clause "for removal of doubts, it is hereby declared that, save as otherwise expressly provided in this Section or in any other section of this Act..... and thereafter clause 4(ii) (e) is set out. The opening clause "removal of doubts" does not fit in the non obstante clause with which Patna High Court CWJC No.15934 of 2007 (8) dt.13-12-2012 the properties of S. 4(4)(ii)(e) opens. Indeed, the object of S. 4(4)(ii)(e) is evident from the very language employed in that provision which indicates that irrespective of any provision in any other law transfer, disposition of properties moveable or immoveable either in part or in whole made after 29th October, 1978 of the scheduled undertaking shall be invalid and stand annulled and the Collector shall take possession of such properties the undertaking. In correctly reading the enactment as a whole what we have to do is to treat this provision as an independent provision which provides consequences to which we have adverted to, that is, nullification of all alienations effected after 29th October, 1978 of the properties and taking over of the same. That is, because under the prior enactment a notification has been issued on 29- 10-1978 to take over the sugar mills under S. 17 of the Act then in force. Therefore, there is definitely a cloud in relation to properties belonging to the sugar undertaking which were sought to be taken over. Not only that day is relevant for the purpose of taking over but also if the objectives of the Act have to be achieved situations will have to be taken note of which have arisen prior to the date of the enactment and, therefore, it becomes absolutely necessary to make proper provisions to cover such situations. If the said transaction stood nullified the fact that the properties stood transferred to the petitioner on 5-6-1983 will not be of any consequence and that property will have to be treated as the property of the sugar undertaking being taken over under the impugned Act. Therefore, the exercise suggested by the learned counsel as to the restricted construction that has to be placed on the expression 'distillery' in S. 3(1) or S. 4 cannot be accepted. The decisions referred to by the learned counsel cannot be of any assistance on the construction made by us on the provisions of the Act. If on the date of coming into force of the Act, the transactions entered into after 29th October, 1978 stood annulled in Patna High Court CWJC No.15934 of 2007 (8) dt.13-12-2012 respect of the properties that are being taken over, the said properties must be held as still the properties of the sugar undertaking. Thus if the true effect of S. 4(4)(ii)(e) is borne in mind, the distillery of the petitioner must be deemed to be in the ownership, possession, power and control of the undertaking on the appointed day. Hence, we reject the first contention of the learned counsel that the Act has no applicability to the distillery of the petitioner.” For many a years after taking over of the Sugar Mills and the Distillery, these units have been in limbo as well as withering away. However, on the initiation of the present dispensation, they managed to find takers on a long lease to run the Sugar Mills. Since the companies were not willing to accept the responsibility of such running with the add on of past liability etc., the State Government worked out a policy, which would make the transfer, vesting and running of the Sugar Mills acceptable to the companies, which were willing to take it on long lease. The State Cabinet approved an Assets Transfer Agreement along with kind of Lease Deed which could be executed with the companies that made a successful bid for the units. Lauria Distillery along with Sugauli was transferred to a Public Sector Undertaking, known as Hindustan Petroleum Corporation Limited (HPCL). Patna High Court CWJC No.15934 of 2007 (8) dt.13-12-2012 To make things easier for HPCL, the State Cabinet with necessary inputs from the Law Department worked out an Exit Policy for the employees of the erstwhile Sugar Mills. A kind of golden handshake was offered to the employees related to the Sugar Mill. The employees of Distillery Unit, however, were left in the lurch. A final shape to the Exit Policy was given and funds were released by the State Government but it did not include workers of the Distillery. The workers, therefore, have approached the High Court and want a mandamus upon the State to pay them what is rightfully due to them after the judgment was rendered by the Apex Court stating the legal position with regard to status of the Distillery and its vesting with effect from 18.2.2003 i.e. the date of the order passed by the Hon‟ble Supreme Court. Submission on behalf of the petitioners made at the Bar is that they are entitled for equal treatment as the employees of the Sugar Mills. There is no distinction between them because the vesting of the Distillery into the State or any Corporation created by it was under a common Takeover Act of 1976. If there was any doubt with regard to status of the Distillery, which was fought tooth and nail by SKG Limited right up till Supreme Court, the position in favour of the State stood certified and the Distillery too came to be vested in the State, cannot be doubted or disputed now. Patna High Court CWJC No.15934 of 2007 (8) dt.13-12-2012 If this is the position then an Exit Policy formulated by the State cannot remain confined to the workers of the Sugar Mills alone. Since it has been done such a policy is violative of Articles 14, 16 and may be even 21, of the Constitution of India. It is reiterated that there are no riders attached in the decision of the Hon‟ble Supreme Court when it held that the vesting in the State of the Distillery was also in absolute terms. It is also the contention of the counsel for the petitioners that there is no objective or nexus between creating a class within a class in formulation of the policy for the reason that the Distillery Unit was integral part of the Sugar Mill and the take over was also by the same common Takeover Act. If that be so then by what parameters employees of the Sugar Mill would be treated as responsibility of the State and employees of the Distillery Unit would be left out in the cold to fend for themselves. Even they are entitled to an exit package as they had been unceremoniously dumped without any arrangement for their livelihood, due to the arrangement made by the State with the companies for transfer of these Units on a lease basis. Counsel for the petitioners has been very fair in submitting that they are more than willing to accept a similar kind of package which was offered to the Sugar Mill workers as part of Patna High Court CWJC No.15934 of 2007 (8) dt.13-12-2012 the Exit Settlement Plan and would not place their case or demand any notch higher than the same. If parity is maintained vis- a- vis the Sugar Mill workers, they will be more than willing to accept the same gracefully. A fierce resistance has been put up by the State against the demand or the relief prayed for by the petitioners in this regard. The State in its counter affidavit has taken a very clear and categorical stand that right from the beginning when the Exit Settlement Plan was envisaged and given a concrete shape and put through the Cabinet vide a memorandum, what was approved by the Cabinet was Exit Settlement Plan for Lauria Sugar Mill workers alone and allocation of funds was made only for them and them alone. Since there was no Exit Plan for the Distillery workers, there is no occasion for issuance of a mandamus for enforcement of the Exit Plan on the basis of certain letters and communications which have been annexed with the writ application. The reference to the words “DISTILLERY SAHIT‟ used in various communications did not mean inclusion of workers of the Distillery in the Exit Settlement Plan but it only meant that what was being leased out to HPCL was Sugar Mill with the Distillery. It is also the stand of the State that prior to the vesting Patna High Court CWJC No.15934 of 2007 (8) dt.13-12-2012 or taking over of the Distillery or at least till the decision by the Apex Court on 18.2.2003, the Distillery was being run by the company, which was the petitioner before the Hon‟ble Apex Court. Before the judgment of the Hon‟ble Supreme Court came to be pronounced, the erstwhile management of the Distillery declared a lock out on 31.5.2002. In a similar situation the lock out in Mirganj Distilery came to be tested before the Labour Court and the Labour Court held the lock out to be valid and legally justified. Since the lock out was never lifted, similar analogy will apply to the case of the present petitioners and the State cannot have any liability or responsibility towards them. After the lock out, the workers were not on the job. When the vesting of the Distillery took place, the workers were not there to be taken care as the lock out was never lifted. The Workmen never became an integral part of taking over and its vesting. No obligation upon the State has been created towards the workers of the Distillery Unit. Various memorandums drawn up seeking approval of the Cabinet as well as opinion of the Advocate General etc. has been annexed with the counter affidavit to support the stand taken by the State. The State counsel, therefore, sticks to the stand taken in the counter affidavit that the writ application has no merit and is fit to be dismissed under the circumstances referred to above and on the basis of Patna High Court CWJC No.15934 of 2007 (8) dt.13-12-2012 materials annexed with the counter affidavit. Counsel for the petitioners thereafter submits that declaration of lock out on 31.5.2002 is not in dispute. But he has a serious objection and dispute about the stand taken by the State and the interpretation which is sought to be given by them as to the significance of the lock out as well as its fall out. The lock out could have been declared by the erstwhile management. But declaration of lock out by itself does not bring to an end the master servant relationship between an employer and employees/ workmen. Lock out by its very nature and definition in the Industrial Disputes Act is temporary in nature and lock out by itself can never severe the relationship of the management and the workmen. By resorting to lock out the workers were prevented from working temporarily. It could be legal or illegal lock out but that by itself is not an indicator that it is final bye bye from the management side to the workmen. Counsel has reasons to submit so because of the age old wisdom of the Hon‟ble Supreme Court on such issue which still occupies the field. A judgment rendered in the case of Lakshmi Devi Sugar Mills Limited v. Ram Sarup and others, reported in AIR 1957 SC 82, is still an authority on the proposition. The Hon‟ble Apex Court in the said judgment had Patna High Court CWJC No.15934 of 2007 (8) dt.13-12-2012 this to say in the following paragraph: “13. We agree with the reasoning adopted in the above cases and are of opinion that a lockout is neither an alteration to the prejudice of the workmen of the conditions of service applicable to them within the meaning of cl. (a) nor a discharge or punishment whether by dismissal or otherwise of the workmen within the meaning of cl. (b) of S.33 of the Industrial Disputes Act, 1947, or S.22 of the Industrial Disputes (Appellate Tribunal) Act 1950, Conciliation Officer, Board or Tribunal as the case may be is necessary to be obtained before a lockout can be declared. If the lockout is legal, no question can at all arise. If, on the other hand, the lockout is illegal, a remedy is provided in S.26 of the Industrial Disputes Act, 1947. The employees affected by a lockout would in any event be entitled to refer the industrial dispute arising between themselves and the employer for adjudication by adopting the proper procedure in regard thereto.” therefore, no permission of Yet another decision on which reliance has been placed is the case of Feroz Din and others v. State of West Bengal, reported in AIR 1960 SC 363. The relevant paragraphs are reproduced below: “17. The Act therefore treats strikes and lock-outs on the same basis; it treats one as the counterpart of the other. A strike is a weapon of the workers while a lock-out that of the employer. A strike does not, of course, contemplate the severance of the relation of employer and employed; it would be strange in these circumstances if a lockout did so.(emphasis mine)

#21. It, therefore, seems to us that the words "refusal by an employer to continue to employ any number of persons employed by him" in S. 2(1) do not include the discharge of an employee. We feel no Patna High Court CWJC No.15934 of 2007 (8) dt.13-12-2012 difficulty in taking this view, for it does not seem to us that the words "refusal to continue to employ" in S., 2(1) plainly include a discharge. These words have to be read with the rest of the definition and also the word lock-out. The other parts of the definition contemplate no severance of the relation of employer and employed. The word "lockout" as stated in the Presidency Jute Mills Co's. case, 1952 Lab AC 62, in its dictionary sense means refusal on the part of an employer to furnish work to his operatives except on conditions to be accepted by the latter collectively. Therefore, in our opinion, the rules of interpretation do not prevent us from giving to the words used in the definition the meaning "a refusal by the employer to allow any number of persons employed by him to attend to their duties without effecting a termination of service", as was done in the Presidency Jute Mills Co.'s case, 1951 Lab AC 62, which would avoid one part of the Act coming in conflict with another.” If this the law of the land then the Court will have to repel the argument of the State that since there was a lock out by previous management which was never lifted after vesting so they have no obligation to the workers of the Distillery. The matter will have to be decided within the parameters of the facts and the principles of law which has emerged therefrom. After the decision of the Hon‟ble Supreme Court in the case of Shri Krishna Gyanoday Sugar Mill (supra) as well as the decisions which have been relied and quoted above, the vesting of the Distillery Unit in the State is absolute. But it by no means can mean that the workers would not be an integral part of the vesting, Patna High Court CWJC No.15934 of 2007 (8) dt.13-12-2012 more so when there is no resistance on the part of the State that there was an obligation created by the take over with regard to the Sugar Mill workers. The dichotomous situation or interpretation sought to be created by the State in regard to the present petitioners, who are workers of the Distillery Unit, is not understood by the Court. In my opinion, there is no distinction in the status of the workmen of the Sugar Mills vis- a- vis the workmen of the Distillery. If this distinction has been created by the State, it surely violates Articles 14 and 16 of the Constitution of India. The distinction also further does not meet the rational or the objective of creating a class amongst a class. Even if the factum of lock out on 31.5.2002 is accepted including the fact that on the date of take over on 18.2.2003, the workers were not performing their duties as the Distillery was closed but taking cue from the observations made by the Hon‟ble Apex Court with regard to the meaning of „lock out‟ or fall out thereof, it is clear that a lock out is neither alteration of conditions of service nor it is discharge or dismissal by virtue of the said lock out. The master servant relationship stood its ground. It has been beautifully put by the Apex Court that a strike is a weapon of the workers while a lock out that of the employer but even if the lock out is held to be legal, the master servant relation does not end in Patna High Court CWJC No.15934 of 2007 (8) dt.13-12-2012 any manner. Since the State has not been able to place any reliance on any decision of any court expressing a divergent opinion on proposition or principle which has been laid down in the two decisions of the Apex Court with regard to lock out then learned counsel for the petitioners is correct in asserting that the State cannot shake off its liability so far as workmen of the Distillery is concerned. They are an integral part of the vesting in the State and the State has further created a hostile and discriminatory atmosphere by treating one set of workmen to have a legal right to be given a golden handshake whereas similarly and identically placed workmen of the Distillery are treated as a different class. The Court is not impressed by the stand of the State that since the State Cabinet did not provide for any Exit Plan for the Distillery workers they have no obligation to meet and they cannot be extended any benefit vis- a- vis the workers of the Sugar Mills as it is totally misplaced and dehors the law. The decision, conduct or policy of the State smacks of arbitrariness or irrationality. Therefore, the writ application is allowed with a clear direction upon the respondents, especially the Chief Secretary, Government of Bihar that he has a duty to put in place an Exit Policy even for the workers of the Distillery Unit Patna High Court CWJC No.15934 of 2007 (8) dt.13-12-2012 within a period of three months from the date of production/ communication of a copy of this order, in favour of the Distillery workers i.e. the petitioners, at par with the Exit Settlement Plan, which was put in place for the Sugar Mill workers and provide benefits accordingly. This Court has to remind the State authorities that the Preamble of the Constitution has not undergone any change in so many years despite several amendments to the Constitution and we still continue to be a sovereign, socialist, secular democratic republic and the State is bound to secure Justice, social, economic and political as well as equality of status and opportunity. The Court is also tempted to quote from observation of the Hon‟ble Supreme Court in the case of Harjinder Singh v. Punjab State Warehousing Corporation, reported in 2010 (3) SCC 192. to observe “21. Before concluding, we consider it necessary that while exercising jurisdiction under Articles 226 and/or 227 of the Constitution in matters like the present one, the High Courts are duty-bound to keep in mind that the Industrial Disputes Act and other similar social welfare legislative legislations and the same are required to be interpreted keeping in view the goals set out in the Preamble of the Constitution and the provisions contained in Part IV thereof in general and Articles 38, 39(a) to (e), 43 and 43-A in particular, which mandate that the State should secure a social order for the promotion of welfare instruments are Patna High Court CWJC No.15934 of 2007 (8) dt.13-12-2012 of the people, ensure equality between men and women and equitable distribution of material resources of the community to subserve the common good and also ensure that the workers get their dues. More than 41 years ago, Gajendragadkar, J. opined that: “10. …The concept of social and economic justice is a living concept of revolutionary import; it gives sustenance to the rule of law and meaning and significance to the ideal of welfare State.” created “30. Of late, there has been a visible shift in the courts‟ approach in dealing with the cases involving the interpretation of social welfare legislations. The attractive mantras of globalization and liberalization are fast becoming the raison d‟etre of the judicial process and an impression constitutional courts are no longer sympathetic towards the plight of industrial and unorganized workers. In large number of cases like the present one, relief has been denied to the employees falling in the category of workmen, who are illegally retrenched from service by creating by-lanes and jurisprudence developed by this Court in three decades. The stock plea raised by the public employer initial employment/ engagement of the workman/ employee was contrary to some or the other statute or that reinstatement of the workman will put unbearable burden on the financial health of the establishment. The courts have readily accepted accountability of the wrong doer and indirectly the wrong punished ignoring the fact that he may have continued in the employment for years together and that micro wages earned by him may be the only source of his livelihood.” tiny beneficiary of in such cases side-lanes unmindful “31. It need no emphasis that if a man is deprived of his livelihood, he is deprived of all his Patna High Court CWJC No.15934 of 2007 (8) dt.13-12-2012 fundamental and constitutional rights and for him the goal of social and economic justice, equality freedoms of status and of opportunity, enshrined in the „Constitution remain illusory. Therefore, the approach of the courts must be compatible with the constitutional philosophy of which the directive principles of State policy constitute an integral part and justice due to the workman should not be denied by entertaining the specious and untenable grounds put forward by the employer- public or private.” (emphasis mine) The writ application is allowed with the directive to the State as above. (Ajay Kumar Tripathi, J)