M/s. Kshitij _lnfraventures Private Limited v. procedure

Petition under Section 151 CPC praying that in the circumstances stated in the affidavit filed in support of the petition, the High Court may be pleased to vacate the interim order granted on 31-O1-2O24 in W.P.No.195612024 by dismissing the writ petition, in the interest of justice Counsel for the Petitioner: SRl. SHYAM S AGRAWAL Counsel for the Respondent Nos.1&2: GP FOR LABOUR Counsel for the Respondent No.3: SRI CH. OMERNATHAN Counsel for the Respondent No.4: SRI A.K. JAYAPRAKASH RAO The Court made the following: ORDER ) HON'BLE SRI JUSTICE NAGESH BHEEMAPAI(A . WRIT PETITION No. 1 956 0F 20.24 ORDER: Heard Sri Shyam S.Agrawal, learned <:ounsel for petitioner, learned (iovernment pleader lbr Labour on behall. of the 1st respondent, Sri A.K, Jayaprakash Rao, learned r:ounscl on behalf of the 4tl, respondent and Sri Ch. Omerna t ll.rn, learncd counsel lor the 3rd respondent.

2. This Writ petition chalienges tl-re vaiidiq, ancl proprietv o[ lhe order dated 22-09-2023 in I.A.No. i.] ol 202] in M.P.No.5 of 2019 on the hle of the Additional Indrrsrri:rl Tribunal cum Additional Labour Court, IJyd"..Orn (2,,,, respondent). By the said order, petitioner r.vas dire ctecl to deposit Rs.49,O0,00O I - to the credit of M.p.No.5 of 2O I9 t.itl,rirr a period of four months from the date of the said order.

3. M,P.No.S of 2Ol9 was filed by the 3.a respondcnr, DBR Mills trmployees' Mazdoor Union, in Form K_3 -.rncler Section 33C(5) of the Industrial Disputes Act, L947 (for short, 'the Act), rvith a prayer to compute the amount allegedly clue to the rx,orkers and direct petitioner to pay the same to the 3,d respondent with accrued interest. petitioner contends Lhat .tn agrecmcnt dated 07-03-20 17 u,as er'rter..l into undcr Scctior.r 12(3) of the Act before the Conciliation Ofliceri.loin r ') Commissioner of Labour, Hl.derabad, wherein theY agreed to Rs.7,0O,0OO/ - in tr'r'o instalments- cornpensation, and pay zi total anrounL of Rs.2,OO,OO0/- as first instalment and Rs'5'00'OOO/ as second instzrlment-as fuil and final settlement of all arrears' back dues' \r,a6{es, Subsequcntly, thc 3'd respondent fi1ed I A No'13 of 2O21 under Section 11 of thc Act seeking a direction to petitioner to deposit a sutn of Rs.4q,0O,OOO/ in compliance with the Memorandum of Scttlement datcd O7-O3-2OlT Petitioner hled a counter to the sairl Applicaticn- disputing the claim made by the 3'd respoudcnt. Petitioner states that agreement dated 07 O3-2O17 vras lollorvcd trt' a memorandum of compromise and a comprtimise deci'r:e in O.S'No 69 ol 2O03 (earlier O S'No 1201 of 1995) on il.re tile of the XII Additional Chief Judge' City Civil Court, Hyclqrabacl. Under the compromise' the 4rh respondent $,as lo obtain iitle over Acs 16'00 of land' which was to be developed bv petitioner as per a development agreement' Petitioner contencis that it had the right to settle the workers' claims on behalf of the 4th respondent pursuant to the compromise. Hoq'ever, [he 4m respondent, who was a tenant in DBR Mills property, opposed the compromise and initiated l;tigatiou lrv filing C C C.A.No.329 of 2OO3 before the High Court -) and latcr before the Hon,ble Supreme Court. This lcd to two rounds of litigation and eventual dismissal of SLp.No.5163_5164 ol 2022 uide <>rder dated B-O4-2O22, resulting in rhc compromise clecrce being set aside and the 4ttr respondent being treatcd as a tenant at suflerance. It is the case of petitioner that all partics, inclucling workmen, vrerc fully aware at the time of cntering into the agreement dated 07 O3-2O17 that petitioner was not employer ol the said workmen and that the provisions of the Act are not applicablc to them. The said settlement itself narrated the nature of relationship, specifically referencing the dcvelopment agreement dated 15-O3-1999, based on which dcvelopmcnt rights were granted by the 4d, respondent to petitioncr. Subsequcntly, the 4rh respondent repudiated the compromise. It is also stated, the 3.d respondent filed O.S.No.293 of 2016 againsI petitioner for cancellation of registered documents executed by the original owners of the propert_y in favour of petitioner. Despite attempts by petitioncr to give cffcct to the compromise decree, including legal challenges, Appeal was dismissed and the subsequent Special Lcave petition also met with dismissal, thereby frustrating the compromise. It is the contention of petitioner that tl-re 2.d Tribunal was fully aware of the developrnents, respondcnt I 1 inciuding frustratioll of the compromise due to the conduct of the 41t'responrierrt and thc pendency of litigation by the workers of Lhe 4rr' respondent regarding u'ages which had originated in 20 1.3 and contruued e ven after the agreement dated 07-O3-2O77. 'lhe saicl M.P'No.1 of 2013 was eventually dismissed b5,' the Tribunal by orde r dated 13-07 -2021 ' Petitioner asscrts that development agreement between petitioner ancl thc 4e respondent stood nullified due to the fi-uslration of the compromise decree , which formed foundation of 1 2(3) agrce mer.rt dated O7-O3-20 17. Consequcntly, petitioner has becomc a third party with no employer-employee relalior-rship and rvith no legal authority or authorisation from the 4th responcient to settle any claims on its behalf' Therefore, imposing :r iegal liabitity on petitioner is impermissible under law. Pctitioner furthcr contended that upon being approacl'red b'i workmen of the 4th respondent for implementation of the agreement, the Assistanl Commissioner of Labour-lIl, H-vderabad, was instructed to file a criminal complaint. and .lccordingly, they filed Crl.M.P.No 1722 of 2023 before thc XII AdCitional Metropolilan Magistrate, Hyderabad, seekir-rg relicf similar to thc present proceedings. it is aclmitLed th.rt there is no employer-employee relationship f betu,een petitioner and workmen of the 4th respondent, hence, petitioner states that the orde r impugned is witlrout j urisdiction and therefore, is liable to be set aside . It is stated, the Joint Commissioner of Labour, Hyderabacl addressed letter dated 25-07 2}la to Lhe Government Pleader secking clarihcation with respect to agreement dated 07-03 2017. Tine said letter narrate s the entrre lactual chronologr and concludes that there u'ere several objections raised by M/s DBR Mills Limited, workmen and petitioner. It was observed therein that since petitioner is a third party, the te rms and conditions of the agreemen t cannot be enforced. Despite no opinion being received from the Government Pleader, the Joint Commissioner instructed the Assistant Commissioner to file a criminal complaint, v"hich remains pending. Furthermore, the 4th respondent addressed letter dated 04-12 2017 to the Joint Cbmmissioner of Labour, Hyderabad clearly stating that petitioner had no right to negotiate or settle the dues on behalf of the 41h respondcnt' It is also submitted by petitioner that as per Seclion 12 of the Act, when an industrial dispute exists, the Conciliation Ofhcer is to conduct proceedings and submit a report within 14 days and a settlement, if any is to be lbrr.r'ardecl to the appropriate Government. Only upon satisfirction can the 6 Ci or.e rnmcr t refer the matter to a Tribunal. [n the instanl case, therc is no record of compliance u'ith these procedural rcquircmenls. lt is also contended that there is also rclerence to an orcler of slatus quo dated 16-06 2008 in W A.M P'No 814 of 2OO8 in Writ Appeal No. 39 1 of 2008, where the Union of trmployees u.as arrayed as the 7tl' respondent. It is further argued that a criminal complaint rvas hled by the Assistant Labour Conrmissioner on the same set of facts as the prcsent clispute ar-rd parailel prosecution in t'r'o Courts on thc same matter is not iegally-permissible. Petitioner reiterates that it is r-rot the management of DBR Mills, hence had no legal status or IocLts 10 entcr inlo an.rr 12(3) agreemenL with the workmcn lt is cmpha sizcd lhat petitioner does not fall within the definition of crnplo-r'cr' or 'rnanagemenl' under Lhe Act and therefore cannot be subjecte<l to its provisions. The definition of 'settlement' unclcr Section 2(p) of the Act necessarily requires a valid emplol,sr u.orkman reiationship, which is absent in the present CASE Petitioner further states that it was the responsibility ol the Conciliation Officer to provide proper legal guidance to '"r'orkmen regarding the parties to any such seLticmcnt. Desp,jls these legal shortcomings, Lhe Tribunal passed the impugned order directing petitioncr to dcposit 7 Rs.49,OO,O0O/ in M.P.No.5 of 2019, which is illegal and contrary to law. It is finally stated that merely because petitioner had agreed to pay the amount w,hich u,as due by thc 4h respondent to the employees in view of their enlering tnto development agreement in respect of the land covered by the 4ri, respondenL, they could not be directed to pay the amount

4. The Joint Commissioner of Labour Illcd counter stating that the present disputc pertains ro peritioner aDd Respondents 3 and 4 and that subject mat[er lies exclusivcly between these parties. It was emphasized that lhe role of the Labour Department is purely formal in natLtre, therefore, no relief can be sought against the Labour Department in this context.

5. In the counter filed on behalf of the 4tlt respondent it is stated that in M.P. No. 5 of 2O 19, petitioner being a signatory, had admitted the Settlement under Section 12(3) of the Act, hence, they are liable to pay the agreed amount. It was further asserted that the said Settlement is binding upon petitioner and the 3.d respondent, but not upon the ,1th respondent, who was not a parfy or signatory to Settlement. It is argued that contentions raised by petitioner extend bcyond the scope of the order passed by the Tribunal. i ,,;: 8

6. 'lhe 3'd respondent - Union hled a counter stating that peiitioncr. in its counter to the original petition, admitted the Se 1. ticme nt ltnde r Section 12(3) and expressed willingness lo cicposii the agrced amount until disposal of the main mrsccllaneous petition. However, they raised objections, such as non-ciisclosut'e cl' number of workers by the Labour Department and r:lerimecl thal it was willing to deposit and pay the agreed anlount ol Rs- 49,O0,000/- if such information wcre provided lt r*,'a s further s[zrred that petitioner had earlier seltled claims of some rvorkers through the Memorandum of Settlement dated C)7 -A3 )O 17 . This indicates that petitioner, after cor-x''incing r.orkcrs of a comprehensive financial resolution, delayed exer:ution u,ithout reason and later, attempted [o cscape the Ii:ihilitii:s :,()lLlltLarily undertaken in the settlement ln'hen the mati.er lvas iakcn before the Tribunal. The Tribunal rightly held that pcLitior-rer's ottjections and apprehensions lacked mcrit and that rhc ztmount should be deposited in court. It is t.he further case of the 3'd responclent that lrctitioner's claim that Memorandum of Settlement dated (.\'i -O3 )-Ai7 Lrecarlre unenforceable due to dismissal of SLP Nos. 51ir3 5164 ol 2.022 on |B-O4-2O22 is false. Pctitioner in tr: n iirr Lrailt, s'.ilrprressed details of prior proceedings beforc the Lrial Llourt anci the High Court before moving the Hon'ble 7 g Supreme Court. The SLPs. were dismissed al the threshold solely on the ground of limitation, due to a de tay of 169 I days' and not on merits. Petitioncr was accused of rrisrcprt'stntiit ion' abuse of process, and misleading the Court Hence' thcy are not entitled to anY relief. It was also submitted that parties ancl rl'rird parties to O.S. No. 69 of 20O3 had filed C C C A' Nos 350' 71' 329 of 2O03 and C.C.C.A. No. 13 1 of 2OO4 challengir-rg the c'rmpromise decree dated 03-04-2003. All the appeals u'erc dismissed by a common judgment dated I2-O4-2OO4 c<'ulirrrrirrg rhe compromise decree. The matter was remanded to thtr rrial court solely for verifying the suit schedule properly's markct value and court fee. SLP Nos. 13630 of 2O05 and 13b33 oi 2OO5 u'ere hled before the Supreme Court, u'hich u'crc dismissed or' 21-Oa-2OO5. Review petitions against the dismissal rvere also dismissed on 24-Oa-2OO1. Post-rcrnand, aticr multiplc adjournments, suit was dismissed on 28-04 20 15 bl the XIII Addl. Chief Judge, City Civil Court, Hydcrabad, trs plaintiifs PaY lailed Petitioncr later liled C.C.C.A. No. 66 of 2O2O zrggrievcd bv the dismissal judgment dated 28-O4-20 15, along r'r'irh l A No l ol 2O2O under Section 5 of the Limitation Act to condonc the dcla-v of 169 1 days. This petition was dismissed on 07 OI 2022' fee' l0 I)ctilirrnr:r filcd SLP Nos. 5163,5164 of 2O22, which ',r,erc riisn-risscci ltv rl.lc Supreme Court on la-O4-2022. Hence, lrcriti:rirt r's r'lr.int that setllement dated 07 03 2017 bccame unenlirrccable is lhlse. The petitioner u,as fully au,are of thc pcndin-q litigarrons related to DBR Mitls, including those ciisnrisst'cl rrrrrch Irc:forc the clate of settlement. The compromisc c{ccrcr: iir rhc ,.\prrczrl by DBR Mills management was disrnissed irr 200.1 ic. lll -r r::rrs before the settlement. Therefore, petitioner ( itjiil(-rr ncin ci[,,- rhis litigation to avoid the settlement. Thcy \oiunliiril.. aglccd to pa-y Rs. 7,OO,OOO/- in two installments- l{s. 2.O0,0()0,/ on 3l-O3-2O17 and Rs. 5,00,O0O/ on l+-0i1 -)(!17. lrrrl dr:[arrlted in making the paymcnt despite ,.,r-riL.rrrirrrill s('IL]ir)q r,r,orkcr claims under Section l2(3) of the Act :rr;cl RLtl': l){J ()t-(11c 1'clangana State Industrial Disputes Ilules, I (.rSE. Petil ioner- ir-rformed the Commissioner of Labour and r'n1cr(.(i int() (i'1,, Memorandum ol SettlemenL on 07 O3-2OIT, c\(.jrtt('(i t:r,lirrc. tl'ie conciliation officer and the Joint (lo nrrnissionr.r of I-abour, Hyderabad (Twin Cities), after tl-re suit irt O.S No. 69 of 2003 (Old O.S. No. 1201 of 1995) was rli:;rni:;sccl on'r8 ()4-2015. Hence, it is argued that petitioner is ple cludcd frtrm phrading that settlement became unenlorceable , ill;r' 1,-; i r. i i , ; 1 i l t i r t i ( , i r of the said suit proceedings. lt is alleg<:cl that 7 l1 , the petitioner is abusing legal process and harassing the respondents by delaying legitimate claims' It is contended that once thc Mcmol andunl of Settlement dated O7 O3-2O17 was executed under Scction I 2(3)' creating a pre-existing admitted liability, pctitioncr is burrcd from questioning the proceedings initiatcd undcr St-ction 33(C)(2) of the Industrial Disputes Act These procecdings rverc initiated after obtaining a recovery certifical'c un<ler Scction 33(CX1). It is submitted that workers uere subiectt:d to harassmentandmentalturmoilduetofalseprrlmisesoI financial relief and employment and that workers u cre iorced ttr approach the Tribunal to enforce petitioner's aclmittcd liability' The proceedings before the Tribunal are legal and valicl The present Writ Pctition is only a continuation ol clelerv tactics b\' the petitioner. According to this responden[' petitiorler clid not inform the Tribunal about dismissal of SLPs' b-v tl-re Hon'blc Supreme Court on l8-O4-2O22 until 05-09-2023 Thc orders were submitted only during the hearing ol :tn irlterirn Application. Petitioner had already admittt:cl in it's c<>unter affidavit before the Tribunal its obligation to p:rv and citccl vergue reasons for non-payment lt did not make an1' eilbrt io obtain worker details from the Labour Departmcnt, rtlr,ealing irs liick o[ inLention to comply. Furthermore, petitioner c'onceitled fihng of \ ) \1 r- Lirrs Wi-it l'r:t itron and the order of stay obtainecl therein. They cliti not cr,'cn i'ilt- a memo to inform the Tribunal and falscly alicqcc', tllit 'l'r ilrrrnal was proceeding dcspite the stay. Thc trial htrrI airt'trdt c()rrrmenced and cross-examination 1r,as complcted br' ',rr:Lrrioirci. 'l o cielay proceedings and avoid thc outcome, pctiti()n('r' al)Pr():r(rhed this Court after four ycars. pctitioner, having r,,olun 1l ri i,,, subjected itself to the provisions of thc Act, cannol rtorr. cl:rinr thaL the Act is not applicable to it.

7. Thi. 'l ribunal in the order impugned recorded that pctition('r lrorn ll-rc vcry inception honestly has been saying that t h r:r' alt rr', , d\ [o pay the amount to the workers who rt ere u'orkinq ;is orr Lht' date of closure of DBR Mills in199 l. Though thri-t' is lon iusrrrli rvith rcgard to number of workers lo r.l,hom lllt: lrit'. li,, :i: is s,rpl)osed Lo be made, at one Stage, the number ol rvorkt rs irs lt(,r the assessment made by the District CollccLor is .]4!.). *1-rg5s.qrrr.ntly', the number is risen to 4g4. petitioner ais() a-gr(,(.(l t1 r'1,.;16 thc payments to 349 workers based on the lctli'r :tdrlrt sst rl b-r, the District Collector dated 27.O5.2O16 -r.r'hich gc'sirrre \\';rr.i taken into consideration by the Tribunal. The Tribun:rl fur-Lhcr' obscrwed that when such was the case, the prL'sent },r:riiion filed by a few employees seeking deposit of the alni)Ltni iis .r Jn(':rsure to secure the amount cannot be denied by pctrtioni r A.s is cvident from the material and from thc order _. 7 l3 impugned, the Union did not want to witl-rdraw thc amount, their cndeavour is only to see to it that amount assurcd as per the memorandum of settlement should be secr-rred. 'lhe zrmount which was agreed upon could not be disburscd -yet. For the litigation between petitioner and respondents, u.orkcrs shoulci not be made to suffer.

8. Having considered the material on record and on perusal ol the order of the Tribunal, it is clear that peLirioner's primary objection is the enforceability of settlemenL agreemcnt citing frustration of the compromise decree in O.S. No. o9 uf 2003 (earlier O.S. No. l2O7 of 1995) and [he rclatcd lir-igation. However, this argument overlooks the far--t that petitioner volunLarily entered into the Memorandum of SetLlemer-rt unc]er- Scction 12(3) of the Industrial Disputes Act, 1947 bcfole Ltrc Conciliation Officer and the Joint Commissioner ol Labonr. Hydcrabad. Petitioner, having voluntari$ agreed to l)av [hc workers the sum of Rs. 7,O0,0OO/ - as part of rhe setticmer L. cannoL now seek to escape its obligations merelv clue to titc complexities arising from other litigation. F urthermorc, petitioner made admissions in its pleadings reg:rr-ding the workers'claims and its involvement in the setllement process. Therefore, despite . the technical arguments raiscd by the i pctitioncr regarding the lack of an emp[oy,cr empLr_1'ee 14 \-- 1 \,i\t'! - relationship, it is evident that they assumed responsibility for the u,orkers' claims and cannot now distance itself from the settlemcn'r. c). Pe litioncr raises the issue of frustration of compromrse rlccrre, resulting from the dismissal of SLP Nos. 5163-516.+ ol -l(.,22 by the Hon'ble Supreme Court. However, this argument docs not invalidate the settlement under Section 12(3) frrr ri r.r'a s nrade in compliance with the provisions of the Act:rncj pt:titioner-oannot no',,r, claim that it is unenforceable due to the oulcon.rc of the compromise decree in unrelated litigation. It is general principle of law of contract that when a party agrees to ihe tcrms of sc:ttlcment and signs the agreement voluntarily, the said partv is bouncl by the terms of settlement. It is not the case o[ peiit-ioncr that they '"r,ere forced, coerced, [hreatened or mi,sreprcscr tr--(l llr cnter into the memorandum of settlement. 'lhey l..ervr--' 1,oli.rrr..rrily undertaken the obligation to settle the ,,r.orkers' claint.;. hence, the Tribunal is well r,l.ithin its jurisctir:l-icn trr riiirct thern lo fullll this obligation.

10. Pcliirrrner challenge s the jurisdiction of the Tribunal arguing tha t rt rs :r third party and has no authoritv to be clireclcri to <leposil lhc amount. Hor,l'ever, the Tribunal's order is Lraseri on thc lcqri obligations arising from the settlement. The 47 15 Tribunal, having considered the claims of the workers and petitioner's role in the settiement, rightly exercised its jurisdiction in directing the latter to deposit Rs. 49,O0,O0O/ -' Petitioner's objections regarding the Tribunal's jurisdiction are unsubstantiated and fail to establish any vaiid grounds for interlering with the Tribunal's order. Despite acknowledging its liability and agreeing to pay the sum in installments, petitioner failed to make the payments in a timely manner' This delay has caused undue hardship to workers, who have been waiting for financial relief for several years. The Tribunal, in its order, rightly emphasized petitioner's failure to fulhll its obligations and directed deposit of the amount to ensure that workers' claims are addressed. In the light of the foregoing discussion, it is clear 1L that petitioner's arguments do not merit interference with the order of the Tribunal. The Tribunal's direction to deposit Rs. 49,O0,OOO/- is within its jurisdiction and is consistent with the provisions of the Industrial Disputes Act, 1947 ' The petilioner's attempts to avoid its obligations based on technical and procedural arguments are without merit and are rejected' Therefore, Writ Petition is liable to be dismissed' I I 16

12. costs.

13. The Writ Petition is accordingly, dismissed. No ' Consequently, the interim order dated 31.01.2024 which was extended until further orders shall automatically stand dissolved. //TRUE COPY// ./ SD/. L. LAKSHM l(:1 T="i IBABU STRAR SECTION OFFICER One CC to SRl. SHYATM S AGRAWAL, Advocate I PUC] One CC to SRl. A.K. JAYAPRAKASH RAO, Advocate [OPUC] One CC to SRl. CH. OIMERNATHAN,Advocate [OPUC] Tvvo CCs to GP FCR L,ABOUR ,High Court for the State of Telangana at Hyderabad [OUT] Two CD Copies BM GJP To, 1 2 J i 5 $ HIGH COURT I DATED:291041202s 'c 9R 1HE SI /( ORDER WP.No.1956 of 2024 J o o 23,lul 6 f- (, o * D6.9 l'jATc * DISMISSING THE WRIT PETITION WITHOUT COSTS a @c{ 6 6 \