Uzhiyar SangamRajaganapathy NagarMettur Dam 636 401 v. The Union of India

IN THE HIGH COURT OF JUDICATURE AT MADRASDATED:07.08.2009CORAM:THE HON'BLE MR. JUSTICE P.JYOTHIMANIWRIT PETITION Nos.20435 of 2003 & 37484 of 2007 Salem Mavatta Kanima NiruvanaUzhiyar SangamRajaganapathy NagarMettur Dam 636 401represented by its PresidentK.Vijayan. .. Petitioner in W.P.No.20435 of 2003Tamilnadu Kanima NiruvanaUzhiyar Sangam, rep. By itsGeneral SecretaryV.P.Chinalan NinaivagamRajaganapthay NagarMettur Dam, Salem. .. Petitioner in W.P.No.37484 of 2007vs.1. The Union of India rep. By its Secretary to Government Ministry of Labour New Delhi 110 001. .. R.1 in both the WPs.2. The Chairman-cum-Managing Director Tamil Nadu Minerals Ltd., Chepauk, Chennai 600 005. .. R.2 in both the WPs.Writ petitions filed under Article 226 of the Constitution ofIndia praying for issuance of Writ of Certiorarified Mandamus asstated therein.WP.20435/03 to issue a writ of certiorarified mandamusto call for the records relating to the impugned order dated 9.4.2003passed by the Ist Respondent No.L.29011/107/2002 IR(M) quash the sameand consequently direct the st respondent to refer the dispute https://hcservices.ecourts.gov.in/hcservices/ relating to Bonus for the year 2001-2002 for adjudication awardcosts.WP.37484/2007: to issue a writ of certiorarified mandamus calling for therecords relating to the impugned orders No.L.2901/57/2005-IR(M)dt.16.2.06 and No.L.29011/67/2005-IR(M) 23.2.2006 of the Istrespondent quash the same and consequently to direct the Istrespondent to refer the industrial dispute regarding the demand forenhanced exgratia under VRS to workmen employed in quarries of the2nd respondent as given to clerical and office staff of the 2ndrespondent for adjudication, Award Costs. For petitionerin: Mr.M.MuthupandianWP.No.20435/2003For petitioner in: Mr.V.Ajay KhoseWP.No.37484/2007For 1st respondent: Mr.V.Ravi For R.2 in both the WPs.: Mrs.A.V.Bharathi COMMON ORDERThese writ petitions are filed by the Kanima Niruvana UzhiyarSangam. In W.P.No.20435 of 2003 filed by Salem Mavatta KanimaNiruvana Uzhiyar Sangam, the order of the Government of India ischallenged, wherein the Government has refused to make any referenceconsidering the conciliation failure report dated 20.11.2002 andhaving been prima facie satisfied that it is not a fit case foradjudication on the basis that the Union could not substantiate itsdemand. 2. In W.P.No.37484 of 2007, the Tamil Nadu Kanima NiruvanaUzhiyar Sangam has challenged the orders of the Government of Indiadated 16.2.2006 and 23.2.2006, in which the Government, afterconsidering the conciliation failure report dated 27.9.2005 has takena prima facie view that it is not a fit case for adjudication for thereason that the order of the State Government mentioned in thedispute is not applicable to the workers category since the wages ofworkers of Tamil Nadu Minerals Limited are determined throughnegotiated settlement and also on the basis that the Union could notsubstantiate its demand as the order of the State Governmentmentioned is applicable only to those drawing pay in the Governmentscale of pay of Rs.2550-3200. https://hcservices.ecourts.gov.in/hcservices/

3. In the first writ petition, it is the case of the petitionerUnion that it has entered into a settlement with Tamil Nadu MineralsLimited (TAMIN) in 1988 under section 12(3) of the IndustrialDisputes Act,1947, regarding wages and other conditions of service.It is stated that the petitioner Union has demanded 25% bonus andex-gratia to the employees of the second respondent for the year2001-02 in the representation dated 26.9.2002. The petitioner Unionhas raised an industrial dispute before the Assistant LabourCommissioner(C), Chennai, who issued notice for conciliation undersection 12(2) of the Act. It is stated that the second respondentwithout making any payment, has informed that as per law it has paid20% bonus to all its eligible employees. Since there was nosettlement, the Conciliation Officer has sent failure report on20.11.2002 to the first respondent and the first respondent hasultimately passed the impugned order refusing to refer the disputefor adjudication on the ground that the Union could not substantiateits demand.4. The impugned order is challenged on the ground that it is forthe Tribunal or the Labour Court which is entrusted with suchfunction to decide the claim on merits, and such quasi-judicialfunction cannot be exercised by the Government while performing itsadministrative function.5. In the counter affidavit filed by the second respondent itis stated that the impugned order has been passed by the Governmentwithin its powers under section 12(5) of the Industrial DisputesAct,1947. It is stated that the settlement under section 12(3) whichwas signed by the petitioner Union along with other Unions expiredon 31.12.1990. It is stated that the petitioner Union demanded 25%bonus and ex-gratia payment for the year 2001-02 in the letter dated26.9.2002. As per the Payment of Bonus Act, 1965, which is applicableto the second respondent, the second respondent sanctioned 20% ofwages as bonus for the year 2001-02 to all of its eligible workersin accordance with the said Act and the amount has also been paid.In such circumstances, the employees who have received bonus as perthe Payment of Bonus Act are not entitled for any further amount.The claim of any further amount as bonus is against law andtherefore, there is nothing to adjudicate and it is, in thosecircumstances and also taking note of the failure report, theGovernment has passed the impugned order refusing to make referenceon the basis that the claim of petitioner Union for further amount asbonus is opposed to the provisions of Payment of Bonus Act, 1965.6. In W.P.No.37484 of 2007, it is the case of the Union which isstated to represent substantial workmen of the second respondent,TAMIN that the Government issued G.O.No.29 (Finance) dated 13.6.1991relating to Voluntary Retirement Scheme (VRS) for Public SectorUndertakings, and it is stated that the second respondent is bound tofollow the same. As per the said Scheme, if an employee has completed https://hcservices.ecourts.gov.in/hcservices/ 40 years of age and 15 years of service, he is entitled to seekvoluntary retirement. It is stated that the Government of Tamil Naduhas granted relaxation to the workmen employed in quarries inG.O.No.64, Industries Department, dated 19.5.1998, permitting theemployees to go for Voluntary Retirement Scheme without reference tothe age and total number of service. 7. It is stated that in G.O.158, Finance Department, dated13.5.2002, Voluntary Retirement Scheme for Public Sector Undertakingsunder the control of the Government of Tamil Nadu was introduced,under which a minimum of Rs.1.5 lakhs for the persons received lowestpay was to be paid. It is stated that the second respondent, TAMINhas extended the benefit of the said G.O. to the staff and not to theemployees in the quarries. On the request of the petitioner Uniondated 01.10.2002, the second respondent by circular dated 11.05.2004,extended the benefit of the said G.O. to the workers of quarry from22.04.2004, however, the second respondent restricted the guaranteedminimum from Rs.1.5 lakhs to Rs.1 lakh. Further, while G.O.158 hasconferred the benefit to the clerical staff as on 30.7.2002, thesecond respondent extended the benefit to the workmen only from22.2.2004. It was, in those circumstances, the petitioner has raiseda dispute before the Assistant Commissioner of Labour, ShastryBhavan by letter dated 2.8.2004. The Conciliation Officer hassubmitted his failure report, based on which the Government of Indiapassed the impugned orders on 16.2.2006 and 23.2.2006, wherein it isstated that the G.O. of the State Government is not applicable to theworker category since the wages of workers in TAMIN are determinedthrough negotiated settlement and the Union has not substantiated itsdemand as the order of the State Government is applicable only tothose drawing pay in the time scale, Rs.2550-3200. 8. The impugned orders are challenged on the ground that theGovernment cannot adjudicate the issue since the same has to be doneeither by the Labour Court or by the Industrial Tribunal. It is alsostated that the claim of the writ petitioner Union is that adiscrimination has been shown to the workers of the second respondentin respect of payment of ex-gratia amount under Voluntary RetirementScheme and again while extending the benefit under the VoluntaryRetirement Scheme discrimination has been shown to other group ofemployees and that cannot be decided by the Government byadjudicating the issue. In respect of limiting the pay scale atRs.2550-3200 is a matter to be adjudicated on evidence and the firstrespondent while performing the administrative functions ofreference, cannot enter into the dispute as such. 9. In the counter affidavit filed by the second respondent it isstated that the second respondent submitted a proposal to theGovernment to introduce Voluntary Retirement Scheme for the workersand the Government passed G.O.Ms.(3D) No.64, Industries dated19.5.1998 in respect of workers of TAMIN since they are drawing https://hcservices.ecourts.gov.in/hcservices/ negotiated scale of wages as per the bilateral settlements. It isstated that under the G.O. all persons are eligible to avail thebenefit of the Scheme irrespective of age and service, but in caseswhere persons are having less than one year of service, they are noteligible. Again the scheme has provided for unavailed leave withwages. It has also provided for full share of employer'scontribution to the Provident Fund along with employees own shareincluding interest, gratuity as per Rules/Act, one and half monthswages for every completed year of service subject to a maximum of 36months pay as ex-gratia payment or monthly emoluments at the time ofretirement multiplied by balance months of service or Rs.1.00 lakh,whichever is less. 9(a). It is stated that there was no Voluntary Retirement Schemefor staff and Officers of TAMIN till 13.5.2002. It is stated that theminimum guaranteed payment of Rs.1.50 lakhs covers only the staff andofficers drawing the scale of pay of Rs.2550/- and above and theworkers category are not covered under G.O.158 dated 13.5.2002. Itis stated that in order to give better benefit to workmen of TAMIN,based on the representation of the workers, the Government issued anamendment order on 22.04.2004, revising the ex-gratia norms which wasimplemented from 22.4.2004 as two months wages (pay + D.A.) forevery completed year of service or wages for the number of years ofservice left or Rs.2 lakhs whichever is less subject to theguaranteed amount of Rs.1 lakh. 9(b). The second respondent has requested the Government torevise the minimum guaranteed amount of Rs.1.5 lakhs against Rs.1lakh and also give effect to the amendment with effect from13.05.2002. However, the Government issued an order on 17.9.2004,stating that the minimum guaranteed ex-gratia would cover the staffand officers drawing the pay scale of Rs.2550-3200 and above and theworker category is not covered in the Government Order. It was alsoclarified by the Government in respect of the minimum guaranteedamount for workers in public sector undertakings and the same isadopted in TAMIN workers. For the worker category in the secondrespondent the wages payable are determined based on negotiated wagessettlement. It is stated that the first respondent Government hasconsidered that prima facie there is no dispute for adjudication asthe orders of the State Government are not applicable to the workercategory and therefore, the impugned order came to be passed refusingto refer the dispute for adjudication.10. It is the case of Mr.Muthu Pandian and Mr.V.Ajay Khose,learned counsel appearing for the petitioner Union in these casesthat on the face of it, the issue involved is required to be decidedon merit based on facts. While it is the case of the petitionerUnion that the State Government G.O. applies also to the workercategory in the second respondent, under the impugned order the firstrespondent has taken a decision by adjudication as if the workers are https://hcservices.ecourts.gov.in/hcservices/ not entitled for the benefits and the Government has no authorityunder section 12(5) of the Industrial Disputes Act while makingreference for adjudication of the issue to decide the issue either onfacts or on law and therefore, the impugned orders are liable to beset aside.11. On the other hand, it is the contention of Mrs.A.V.Bharathi,learned counsel for the second respondent that on the factual matrix,when prima facie the Government Order passed by the State Governmentis not applicable to the workmen category, there is nothing wrong onthe part of the first respondent Government in deciding that it isnot a fit case for referring the issue for adjudication.12. Mr.V.Ravi, learned Central Government Standing Counselappearing for the first respondent would submit that within thepowers of section 12(5) of the Industrial Disputes Act, it is open tothe Government to take a prima facie decision as to whether thematter has to be referred for adjudication. He would submit that inthe presence of various Government Orders, such reference foradjudication would become futile and therefore, according to him, thepower of the Government under section 12(5) of the I.D. Act is ameaningful one and cannot be exercised for futile claim. He wouldrely upon various judgments of the Supreme Court as well as HighCourts and submit that the claim of the petitioner is frivolous. 13. I have heard the learned counsel for the petitioner as wellas the respondents and perused the records and given my anxiousthoughts to the issue involved in these cases.14. In respect of W.P.No.20435 of 2003, it is seen that thepetitioner Union in its representation to the second respondentdated 26.9.2002 requested not only 25% of bonus but also incentives.In the representation submitted to the Assistant LabourCommissioner (Central) I, Shastri Bhavan, Chennai dated 18.11.2002and during the course of conciliation proceedings pending before theLabour Commissioner, the Union has informed that the secondrespondent TAMIN has stated that 20% of bonus has been paid to theeligible workers and various amounts have been paid to others.However, the complaint of the Union is that it has not been furnishedwith the details. It is also seen in the said representation thatthe second respondent has taken a stand that the bonus could not bepaid to those whose salary exceeded Rs.3,500/- per month. The Unionhas taken a stand that the Government of Tamil Nadu has issued ordersin respect of Transport, Electricity, Civil Supplies Corporations,etc. that bonus to be paid to workers who are regulated by the wagesettlement without reference to ceiling limit of Rs.3500/-. It isalso the complaint that the workers of TAMIN are not paid salary onpar with the Government servants but paid the wages based onsettlement and other benefits given by the Government are notextended to them which is nothing but a discrimination. Therefore, https://hcservices.ecourts.gov.in/hcservices/ it is clear that even though it is the case of the second respondentthat 20% of bonus has been paid to eligible workers, it is the caseof the petitioner Union that there cannot be a wage restriction forthe purpose of payment of bonus and it is not correct to state thatthose who are receiving wages more than Rs.3500/- per month are noteligible for bonus. It is also seen in the conciliation failurereport of the Labour Commissioner that the second respondent has notfurnished any written comments but stated orally that 20% bonus hasbeen paid. 15. On record, it is clear that it is not a case where there isno dispute about bonus under the Payment of Bonus Act, 1965. Ifthere is no dispute about the bonus as per the said Act and if theGovernment is prima facie satisfied that the petitioner Union membersare not entitled for bonus beyond the statutory limit, certainly, itcan be said that the yardstick laid down by the Division Bench inM/s.Shaw Wallace & Co.Ltd. vs. State of Tamil Nadu [(1987) 1 LLJ 177]would apply wherein the principle was enunciated to the effect thatwhen the claim is opposed to the provisions of the Act, theGovernment may refuse to make reference. However, in the presentcase, in respect of persons eligible to receive bonus the wages limitof Rs.3500/-per month is introduced, which is disputed by the membersof the Union on the ground that when wages are paid to the workers onthe basis of wage settlement, the Government of Tamil Nadu directedpayment of uniform bonus. A dispute has also been raised that inother Corporations like, Transport Corporation for the workers towhom wages are paid on wages settlement, there is no ceiling limit inthe payment of bonus. Therefore, a vital point of discrimination orarbitrary decision is being raised by the petitioner Union, whichcertainly requires adjudication by the Tribunal in the manner knownto law. Therefore, there is no difficulty to conclude on the factsof the present case that the Government has attempted to adjudicatethe issue which is not within its administrative function whileexercising its powers under section 12(5) of the Industrial DisputesAct. It is well settled that in a cases where the question of lawhas to be interpreted or in a case where factual assertions are to bemade, it depends upon appreciation of evidence and adjudication,which is a process known to the Industrial Disputes Act and thatcannot be done by the first respondent while performingadministrative function by refusing to refer the issue foradjudication. Therefore, the plea of the petitioner Union has to beaccepted and the impugned order of the first respondent is to be setaside with necessary directions.16. Again, in respect of W.P.No.37484 of 2007, the issueinvolved, in my considered opinion, is that of mixed question of factand law and the petitioner Union in fact claims a very valuable rightunder Voluntary Retirement Scheme and as per the Government Orderclaiming minimum guaranteed amount of Rs.1.5 lakhs for each of theworkmen who opted for voluntary retirement irrespective of the fact https://hcservices.ecourts.gov.in/hcservices/ whether such workers are covered by the settlement or not. Thequestion of construction of G.O.Ms.No.158 is also raised. While itis the case of the second respondent that the benefit of the G.O.will be available only to the employees who are drawing salary aboveRs.2550-3200, it is the case of the workmen that in case of workerswho are covered by the settlement, such pay restriction is notapplicable and the minimum guaranteed amount under the VoluntaryRetirement Scheme has to be given to all who have opted the Scheme.17. A reference to G.O.Ms.No.158, Finance Department, dated13.5.2002 makes it clear that the Government has categorised thepublic sector undertakings into various categories, viz., (a)Undertakings which are financially sound which can sustain theVoluntary Retirement Scheme from the surplus resources, (b) StatePublic Sector undertakings which are not financially sound butgrowing concerns, which are categorised based on two conditions that(i) its net worth is 50% and (ii) Public Sector Undertakings whichhave incurred loss for three consecutive years, and (c)Undertakings which are financially not sound and proposed to beclosed. It was, based on the said three categories of the StatePublic Sector Undertakings, ex-gratia amount has been paid. Even incases where State Public Sector Undertakings are falling under thecategory, viz., Undertakings which are financially sound andproposed to be closed, an amount of Rs.2.50 lakhs or 30 days salaryfor every completed year of service and 10 days for the balance ofservice left till superannuation, whichever is less in respect of allemployees is contemplated. In such circumstances, simply because thesecond respondent has taken a stand that its workmen are not entitledfor the said payment, if their salary is Rs.2550/- and above itcannot be a ground for the first respondent Government in simplyaccepting the same and concluding that the Union has notsubstantiated its claim. 18. More curiously, under the impugned order dated 16.2.2006,the first respondent has relied upon the G.O. of the State Governmentto come to the conclusion that the workers of the second respondentwhose wages are determined through negotiated wage settlement are notentitled for the benefit of Government Order even though there aresome difficulties appear to exist on the face of it, factually. I amnot expressing any opinion on merits of the case suffice it to saythat the decision of the first respondent in refusing to refer thedispute for adjudication would certainly amounts to adjudication onthe issue which is not within the purview of the first respondentGovernment while exercising its administrative function under section12(5) of the Act. The applicability or otherwise of the Order ofState Government cannot be decided by the first respondent and it isa matter for adjudication and by applying the judgment of theDivision Bench in M/s.Shaw Wallace Co., case [(1987) 1 LLJ 177], itcannot be held that the claim of the petitioner is patently frivolous https://hcservices.ecourts.gov.in/hcservices/ and abuse of any provision of the Act and as observed by theDivision Bench in the above said judgment, the impugned ordercertainly amounts to embarking on the adjudication of dispute. In such circumstances, the writ petitions stand allowed and theimpugned orders of the first respondent in both the cases are setaside with direction to the first respondent to refer the dispute tothe concerned Labour Court or Industrial Tribunal based on theconciliation failure reports dated 20.11.2002, 27.9.2005 and14.11.2005 respectively and such reference shall be made within aperiod of 30 days from the date of receipt of a copy of this order.No costs. kh Sd/- Asst.Registrar/True Copy/ Sub.Asst.RegistrarTo1. The Secretary Government of India Ministry of Labour Shram Sakthi Bhavan Rafi Marg New Delhi 110 001. 2. The Chairman-cum-Managing Director Tamil Nadu Minerals Ltd., Chepauk, Chennai 600 005.+ 2 cc to A.v. Bharathi Advocate Sr.36795,367961 cc to M. Muthupandian Advocate SR.36647+1 cc to Ajay KhoseAdvocate SR.37111. P.D.Common Order in W.P.Nos.20435/03 & 37484/07PKB(CO)EU 1.09.2009.