Palani Andavar Cotton & Synthetic Spinners Ltd. v. Solyraj

IN THE HIGH COURT OF JUDICATURE AT MADRAS DATE : 30.01.2008CORAMTHE HONOURABLE MR. JUSTICE S.J.MUKHOPADHAYAANDTHE HONOURABLE MR. JUSTICE M.VENUGOPALW.A. NO. 12 OF 2008ANDM.P. NO. 1 OF 2008Palani Andavar Cotton &Synthetic Spinners Ltd.rep. by its Managing DirectorNo.231, Dhally RoadUdumalpet 642 126Coimbatore District... Appellant- Vs -1. Solyraj2. A.Sabibullah3. P.Mariappan4. M.Ramalingam5. Marimuthu6. P.Rajendran7. M. Kannan8 S.Sakthivel9. T.Balasundaram10. S.Parthiban11. A.Arumugam12. M.Kuppuraj13 A.Thirumalaisamy14. P.Chellamuthu15 M.Jothinathan16. Nallasivam17. P.Subramanian18. P.Kamaraju19. L.Elangovan20. A.Ravichandran21. M.Nagraj22. K.Nagraj23. K.Sellamuthu24. S.Varatharaj25. K.Thangavel26. S.Kanthasamy27. K.Subramanian28. K.Manickavelu https://hcservices.ecourts.gov.in/hcservices/

29. N.Manoharan30. P.Narayanasamy31. P.Asai Thambi32. P.Ramadoss33. L.Loganathan34. S.Venkatachalam35. R.Murugesan36. K.Jayaprakash37. S.Soundararajan38. M.Nachumuthu39. R.Rajagopal40. T.Mani41. P.Angamuthu42. S.Kanagasabapathy43. R.Jayapal44. V.Balasubramanian45. N.Jeganathan46. M.Mohammed Rafi47. K.Nagarajan48. S.Nataraj49. K.Ibrahim50. K.Thirukumaran51. S.Thirugnanam52. The Presiding Officer Labour Court, Coimbatore.53 K.Thamilarasan54. K.Eswaran55. N.Palanisamy56. S.Ranganathan57. C.Karuppusamy58. A.Krishnasamy59. P.Thangavel60. S.Subramanian.. RespondentsWrit Appeal filed against the order dated 27th Sept., 2007,passed by learned single Judge in M.P. No.1781 of 2007 in W.P.No.7331 of 2006.WPMP.NO.1781/07 presented to issue an interim direction to thepetitioner to pay the respondents 2 to 62 except respondents2,4,8,17,27,40,46,51,52 and 60 to writ petition their last drawnwages as per section 17(B) of the Industrial Disputes Act 1947from October 2005 pending W.P.No.7331/06 presented to this Courtunder Article 226 of the Constitution of India to issue a writ ofCertiorari calling for the records relating to the common awardpassed by the first respondent in ID.NO.137/2004 to 197/2004 dated20.9.2005 and quash the same. https://hcservices.ecourts.gov.in/hcservices/ For Appellant: Mr. V.Raghavachari for Mr. R.K.ChandramohanFor Respondents: Mr. C.K.Chandrasekar for M/s.Row & Reddy for RR-6 to 8JUDGMENTS.J.MUKHOPADHAYA, J.The appellant, Palani Andavar Cotton and Synthetic SpinnersLtd., (hereinafter referred to as 'Company') preferred the writpetition against common award passed by Presiding Officer, LabourCourt, Coimbatore, in I.D. Nos.137/04 to 197/04, dated 20th Sept.,2005. By the said award, the workmen, respondents 2 to 62 to thewrit petition were reinstated with continuity of service and 25%back wages, their order of termination having declared illegal.In the writ petition, the respondents-workmen preferred apetition, W.M.P. No.1781/07, u/s 17-B of the Industrial DisputesAct, wherein, by impugned order dated 27th Sept., 2007, learnedsingle Judge, having allowed the application in respect of most ofthe workmen, except respondents 2, 4, 8, 17, 26, 27, 40, 46, 51,52, 55 and 60, the present appeal has been preferred by thecompany against the said order.2. Learned counsel appearing on behalf of the appellantchallenged the impugned order passed u/s 17-B mainly on twogrounds, i.e., (i) that most of the workmen are working in otherorganisations; and (ii) that in view of the fact thatrehabilitation of the company, which is sick, being pending beforeBoard for Industrial and Financial Reconstruction (hereinafterreferred to as 'BIFR'), and Section 22 of the Sick IndustrialCompanies (Special Provisions) Act, 1985, (hereinafter referred toas 'SICA'), the petition u/s 17-B was not maintainable.In reply, the respondents-workmen have denied the allegationthat they are working in some other organisation and according tothem, the provisions of Section 22 of SICA has no bearing onSection 17-B of the ID Act. Both the parties referred to one orother judgment of High Courts and Supreme Court, which will bediscussed at the appropriate stage.3. We have heard the parties and noticed the relevant factsas referred to.It was brought to the notice of the court on behalf of theworkmen that the concerned workmen have filed specific affidavitthat they are not working in any other organisation exceptrespondents 2, 8, 17, 40, 46, 51, 52 and 60, on whose behalfaffidavit was not sworn. As regards 4th and 27th respondents to thewrit petition, it was informed that they had expired and the https://hcservices.ecourts.gov.in/hcservices/ management has to bring the legal heirs on record. It was alsobrought to the notice of the Court that as regards respondents 2,17, 40, 46 and one N.Subramanian, the dispute was dismissed aswithdrawn.4. Learned counsel appearing on behalf of the respondents-workmen submitted that the company is a spinning mill; it employedthe workmen, who are respondents 2 to 62, for a period rangingfrom 7 to 31 years. The management of the company was employingmore than 350 workmen and they wanted to employ casual labourersto extract regular work. Therefore, the management wanted thatthe permanent workers should opt for voluntary retirement underV.R. Scheme or to accept for a reduction of 40% of the wages. Theunion did not agree to the same. Hence, a dispute was raised bythe management and notice dated 14th Nov., 2002 (Ex.M-13) u/s 9-Awas issued. The workmen were removed during the pendency of theconciliation proceeding without obtaining permission from thestatutory authorities. The conciliation was pending till 23rdDec., 2003, as evident from Exs.W-5 and W-6. The terminationorders were issued between 28th March, 2003 and 9th April, 2003,which were noticed and having found that the orders were contraryto Section 25-N of the ID Act, the impugned award, dated 20thSept., 2005, was passed. It was informed that the workmen weregetting salary of about Rs.4,800/= to Rs.5,300/= per month. Sincetheir date of termination they were without any work/employment.So 25% of the back wages was allowed by the Tribunal.5. Learned counsel appearing on behalf of the appellantproduced an unaffidavited certificate dated 21st Nov., 2007,purported to have been issued by the proprietor of one 'RubyTextiles', SF 115, Jeeva Nagar, Udumalpet. Therein, name of thefive persons, i.e., respondents 9, 12, 13, 14 and 15 have beenshown to suggest that those workmen are working in the said unitintermittently from the year 2003 as daily coolies. It isinformed that Ruby Textiles is not maintaining any record fordaily coolies.We are not inclined to accept the document or the argument asmade by the counsel for the management company for the followingreasons :-(a) The document placed is not an affidavited document norany such pleading has been made either in the writ petition or inthe appeal;(b) The so called certificate dated 21st Nov., 2007, has beenissued after the order was passed by learned single Judge;(c) The language of the certificate raises doubt with regardto working of the persons, whose names have been shown therein, asit is informed that they are working in the unit intermittentlyfrom the year 2003 as daily coolies, but they are not maintainingany record of daily coolies. If the record is not available, itis not clear as to how a textile mill could give such details. https://hcservices.ecourts.gov.in/hcservices/ Further, the textile mill, being a factory, cannot say that theyare not maintaining any record with regard to daily coolies; and(d) The counsel for the respondent also informed that 'RubyTextiles' itself has been closed for more than three years and,therefore, nobody could claim that the mill is functional and theconcerned respondents are working in the said mills.6. In the reply affidavit filed on behalf of the company,they have enclosed a chart showing the number of employees workingin one or other establishment. Most of them have been shown to beworking in T.M. Mills, which cannot be accepted in view of reasonsshown in the foregoing paragraph.So far as their working in other organisations isconcerned, such as GTK Mills, Tiruppur or any security agency, nodetails of such workman has been shown, such as designation, placeof posting, etc., nor any record in support of such statement hasbeen enclosed. Such list also cannot be accepted as it is shownthat some of the respondents are doing business, which is also notbased on record. If any one or other workman, after termination,for their survival, do menial work, such as selling tea or vendingmilk, it cannot be held that he is doing business nor come withinthe definition of "employment" in other organisation.In some cases it is shown that the workmen have taken VRSfrom the company, but again working. Learned counsel for theappellant, to explain the matter, submitted that many personsopted for voluntary retirement and subsequently allowed to jointhe company with lesser wages.On the other hand, according to the counsel for therespondents-workmen, the management, with a view to provide lesserwages to the permanent employees, initially engaged casuallabourers for performance of regular work and then forced thepermanent workers to opt for VRS or to accept service with reducedwages of 40% of existing wage. This proposal having not beenagreed upon by the union, a dispute was raised, as evident fromnotice dated 14th Nov., 2002 (Ex.M-13) u/s 9-A of the ID Act andduring the pendency of the conciliation proceeding, without priorpermission of the statutory authority, the services of the workmenwere terminated in violation of Section 25-N of the ID Act. Inthis background, the Tribunal passed impugned award on 20th Sept.,2005, reinstating the workmen with 25% back wages.7. We have noticed the certificate dated 21st Nov., 2007,purported to have been issued by the proprietor of one RubyTextiles, SF 115, Jeeva Nagar, Udumalpet, to suggest that some ofthe workmen are working in the said textile mill. The saiddocument was never brought on record either before the Tribunal orbefore the writ court nor filed in the present appeal. In fact,it is procured recently, during the pendency of the appeal, on 21stNov., 2007.Learned counsel for the respondents-workmen submitted thatthe certificate dated 21st Nov., 2007, cannot be relied upon as the https://hcservices.ecourts.gov.in/hcservices/ said textile mill is closed since last three years. This was notdisputed by the counsel for the appellant. We are not inclined toaccept the aforesaid certificate dated 21st Nov., 2007, as it isnot filed with any affidavit; issued after the order passed bylearned single Judge; Ruby Textiles is stated to be closed sincemore than three years and the language of the certificate isdoubtful, as in the certificate it is mentioned that they are notmaintaining any record of daily coolies, though a textile mill,being a factory, is supposed to maintain such record. If recordis not available with Ruby Textiles, it is not clear as to howthey have given the names of one or other person to say that theyare working, that too without giving any specific date since whichthey are working.8. Learned counsel for the appellant while submitted that theorder u/s 17-B of the ID Act cannot be passed in view ofprotection u/s 22 of SICA, referred to decisions of the HighCourts and Supreme Court, as referred to below:-i) Supreme Court decision in Kamla Mills – Vs – Workmen &Anr. reported in 1995 SCC (L&S) 901, relevant portion referred tois quoted hereunder :-" 3. ......... We are afraid that thiscontention forgets the fact that the appellant-Mills which was declared as a sick unit on27.8.1987 has since closed down and the BIFR hadto frame a scheme for reconstituting the company.The appellant authority has placed its seal on thesaid scheme. In the absence of the agreement inquestion, the employees represented by the learnedcounsel would have been required to stand in queuefor their dues even under the old scales of payand dearness allowance. It is not known whatpercentage of their dues they would have securedby this process and when. We may also take noteof the fact that the Union has been in the fieldfor several years and knows where the interests ofthe workers lie. They would not have reached theagreement in question if it was not in theinterests of the employees. ......."From the aforesaid judgment it will be evident that SupremeCourt has not decided the issue as involved in the present case,i.e., whether power of Section 22 of SICA is also attracted forpassing any order u/s 17-B of the ID Act.ii) A Full Bench decision of this Court in Godrej & BoyceManufacturing Co. Ltd., Madras – Vs – Principal Labour Court,Madras & Anr. reported in 1992 (2) LLJ 201. In the said case, theFull Bench merely observed that the power of the High Court underArticle 226 of the Constitution is not inhibited by provision ofSection 17-B and said power cannot be used to destroy thestatutory right granted to workmen u/s 17-B, but do not answer thequestion. https://hcservices.ecourts.gov.in/hcservices/ iii) Similar in regard to the judgment of this Court inMadras Labour Union – Vs – Binny Ltd. (Buckingham and CarnaticMills) & Ors. reported in 1995 (1) LLJ 588 , wherein the Benchheld that inspite of the provisions of SICA, the management canenter into an amicable settlement with the workmen. This casealso do not answer the issue.iv) Similar with regard to Karnataka High Court DivisionBench judgment in Vysya Bank Ltd. - Vs – General Secretary, AllIndia Vysya Bank Employees' Union & Ors. reported in 1996 (1) LLJ420, which relates to award of lesser amount than the last drawnwages u/s 17-B of ID Act.v) In one of the case of Rajnagar Textile Mills No.1,Ahmedabad - Vs – Textile Labour Association, Ahmedabad, reportedin 1999 (1) LLJ 522 (Guj) a single Judge of the High Court ofGujarat, while noticed the provision of SICA and recovery ofarrears of wages during sickness of the company, held that therecovery of wages stand entirely on a different footing from thescope of Section 22 of SICA.9. From Section 22 of SICA it will be evident that certainproceedings shall not lie, except with the consent of BIFR orAIFR, as evident from relevant portion of Section 22 :-"22. Suspension of legal proceedings, contracts,etc.- (1) Where in respect of an industrialcompany, an inquiry under section 16 is pending orany scheme referred to under section 17 is underpreparation or consideration or a sanctionedscheme is under implementation or where an appealunder section 25 relating to an industrial companyis pending, then, notwithstanding anythingcontained in the Companies Act, 1956 (1 of 1956),or any other law or the memorandum and articles ofassociation of the industrial company or any otherinstrument having effect under the said Act orother law, no proceedings for the winding up ofthe industrial company or for execution, distressor the like against any of the properties of theindustrial company or for the appointment of areceiver in respect thereof [and no suit for therecovery of money or for the enforcement of anysecurity against the industrial company or of anyguarantee in respect of any loans or advancegranted to the industrial company] shall lie or beproceeded with further, except with the consent ofthe Board or, as the case may be, the AppellateAuthority.In the present case, as the order passed by this Court underArticle 226 for payment of wages u/s 17-B neither could be termedto be a suit for recovery of money nor enforcement of any securityagainst the company. Therefore, on plain reading of Section 22, https://hcservices.ecourts.gov.in/hcservices/ it will be evident that the said provision shall not be attractedfor an order u/s 17-B of ID Act.10. One may also refer to Section 17-B of ID Act, whichmandates the employer to pay wages last drawn by workmen, if anyaward is passed by a Labour Court/Tribunal directing reinstatementof any workman and the employer move against such order before theHigh Court or Supreme Court, as evident from the said provisionand quoted hereunder :-"17-B. Payment of full wages to workman pendingproceedings in higher Courts.- Where in any case,a Labour Court, Tribunal or National Tribunal byits award direct reinstatement of any workman andthe employer prefers any proceedings against suchaward in a High Court or the Supreme Court, theemployer shall be liable to pay such workman,during the period of such pendency of suchproceedings in the High Court or the SupremeCourt, full wages last drawn by him, inclusive ofany maintenance allowance admissible to him underany rule if the workman had not been employed inany establishment during such period and anaffidavit by such workman had been filed to thateffect in such Court:Provided that where it is proved to thesatisfaction of the High Court or the SupremeCourt that such workman had been employed and hadbeen receiving adequate remuneration during anysuch period or part thereof, the Court shall orderthat no wages shall be payable under this sectionfor such period of part, as the case may be."11. The question of grant of wages u/s 17-B normally does notarise in case the employer reinstates the workman, but maychallenge the award subject to reinstatement or if challenges partof the award, relating to payment of wages, etc., exceptreinstatement. Only in case the employer do not implement theaward of reinstatement by filing a petition before the High Courtor the Supreme Court, the employer is supposed to comply with themandate of Section 17-B. The mandate u/s 17-B of ID Act cannot beflouted on the ground of Section 22 of SICA.12. Every authority or person, including company, is bound tocomply with the mandate of statutory provisions, such as Section17-B of ID Act. In case of non-compliance, High Court or SupremeCourt may pass appropriate directions on the authority/person,including company, to comply with such mandate. Apart from thefact that the power of the High Court under Article 226 or that ofthe Supreme Court do not stand curtailed in view of Section 22 ofSICA, direction as may be passed by High Court or Supreme Courtfor implementation of provisions of Section 17-B is also not https://hcservices.ecourts.gov.in/hcservices/ covered u/s 22 of SICA, as evident from the provision mentionedabove.13. Similar case fell for consideration before the Delhi HighCourt in Mideast India Ltd. - Vs – K.M. Unni & Ors. reported in2002 (4) LLN 169. Therein, the Delhi High Court held thatpendency of a proceeding before BIFR cannot be a ground to invokeSection 22 of SICA for granting relief u/s 17-B of ID Act.14. In view of our finding, as recorded above, while we arenot inclined to interfere with the order passed by learned singleJudge, reject the prayer as made in this appeal with furtherdirection to the appellant to pay the concerned respondents-workmen wages u/s 17-B, as per order passed by learned singleJudge, within one month from the date of receipt/production of acopy of this order, failing which they will be liable to payinterest on such amount @ 5% p.a. from the date of filing of thewrit petition till the amount is paid together with a cost ofRs.20,000/= (Rupees Twenty Thousand only) to be deposited infavour of Tamil Nadu State Legal Services Authority, Chennai. Thewrit appeal stands disposed of with aforesaid observations anddirections. Consequently, connected miscellaneous petition isclosed. But there shall be no separate order with regard to thecost of the appeal.Sd/-Asst. Registrar./true copy/Sub Asst. Registrar.GLNTo1. The Presiding OfficerLabour Court, Coimbatore.2. The SecretaryTamilnadu State Legal Services AuthorityChennai.1 cc to M/s. Row and Reddy, Advocate, Sr. 43071 cc to Mr.R.K. Chandra Mohan, Advocate, Sr. 4054 W.A. NO. 12 OF 2008JRG (CO)kk 5/2