THE HONOURABLE MR.S.J.MUKHOPADHAYA, THE ACTING CHIEF JUSTICEANDTHE HONOURABLE MR v. The Ambur Cooperative Sugar Mills National Workers Union

IN THE HIGH COURT OF JUDICATURE AT MADRASDATED: 20.01.2009CORAM:THE HONOURABLE MR.S.J.MUKHOPADHAYA, THE ACTING CHIEF JUSTICEANDTHE HONOURABLE MR.JUSTICE V.DHANAPALANWRIT APPEAL NOS.67 TO 69 OF 2006& W.A.M.P.Nos.134 to 136 of 2006 and 1850 and 1851 of 2006The Ambur Cooperative Sugar Mills Ltd., represented by theSpecial Officer, VadapudupetPost Office-635 812.N.A.Ambedkar District. .. Appellant in all the appealsvs.1. The Ambur Cooperative Sugar Mills National Workers Union, Rep. by its General Secretary, Vadapudupet-635 812 N.A.Ambedkar District.2. The Government of Tamil Nadu, rep. by its Secretary, Food Cooperation and Consumer Protection, Fort St.George, Madras-9.3. Commissioner of Sugars, 474, Anna Salai, Nandanam, Madras-35. .. Respondents in all the Writ AppealsWrit Appeal No.67 of 2006 against the order dated 1.8.2002 passedby single Judge in Writ Petition No.12504 of 1995 on the file of thisCourt.Writ Appeal No.68 of 2006 against the order dated 1.8.2002 passedby single Judge in Writ Petition No.12503 of 1995 on the file of thisCourt.Writ Appeal No.69 of 2006 against the order dated 1.8.2002 passedby single Judge in Writ Petition No.12505 of 1995 on the file of thisCourt. https://hcservices.ecourts.gov.in/hcservices/ WP No.12504/95,12503/95 and WP 12505/1995Writ Petitions are filed to issue the order bearing RC No.32429/C-3/94 dated 10.5.1995 and quash the same.For appellant : Mr.N.BalasubramanianFor respondents: Mrs.A.V.Barathi for R-1 Mr.D.Sreenivasan, Addl.G.P.for RR-2 & 3COMMON JUDGMENTTHE HON'BLE THE ACTING CHIEF JUSTICEAs all these appeals have been preferred by Ambur Co-operativeSugar Mills Limited against the common order dated 1.8.2002 passed bythe learned single Judge in W.P.Nos.12503 to 12505 of 1995, they wereheard together and disposed of by this common judgment.2. The third respondent-Commissioner of Sugar, by his order dated10.5.1995, directed the Co-operative and Public Sector Sugar Mills towithdraw with immediate effect, the scheme regarding encashment ofunavailed casual leave by the workers of Co-operative and Public SectorSugar Mills. The same was challenged by Ambur Co-operative Sugar MillsNational Workers Union, and the Writ Petitions having been decided intheir favour, all these appeals have been preferred by Ambur Co-operative Sugar Mills Ltd. 3. Learned single Judge having noticed that the appellant- AmburCo-operative Sugar Mills provided the benefit of encashment of casualleave to its workers, by circular dated 3.4.1967, and was paid to themuninterruptedly for 28 years till the impugned Circular was issued in1995, and taking into consideration the decisions, including theSupreme Court judgment in the case of "Workmen of Kettlewell Bullen andCo. Ltd. vs. Kettlewell Bullen and Co. Ltd.," reported in AIR 1994 SC1550, held that the said judgment of the Supreme Court is applicable tothe facts of the present case and the customary right of encashment ofleave cannot be taken away in the manner that has been done in thepresent case.4. Learned counsel appearing on behalf of the appellants-Ambur Co-operative Sugar Mills Ltd., submitted that the Writ Petitions were notmaintainable against a Co-operative Sugar Mills, which a Societyregistered under the Tamil Nadu Co-operative Societies Act. Theencashment of unavailed casual leave granted by a Co-operative SugarMills to its employees is not a statutory right which could bewithdrawn at the will of the employer and will not amount to acondition of service at all. Therefore, issuance of a notice under https://hcservices.ecourts.gov.in/hcservices/ Section 9-A of the Industrial Disputes Act, does not arise. In anycase, without raising an industrial dispute under Section 10-A of theIndustrial Disputes Act, the Writ Petitions should not have beenentertained.5. The aforesaid submissions were refuted by the learned counselfor the first respondent-Workers Union, who relied on differentinstructions issued from time to time and the judgment of the SupremeCourt as referred to by the learned Judge in the impugned order.6. We have heard the learned counsel appearing for the parties andnoticed the rival contentions.7. It appears that appellant-Ambur Co-operative Sugar Mills, bycircular dated 3.4.1967, decided to allow encashment of casual leave toits workers including seasonal workers and the said rule came intoforce from 1966-1967 session, translated version of which is quotedherein:"It is a fact that every year the permanentworkers are entitled for encashment of 12 days ofCasual Leave and 6 days encashment for seasonalworkers. In order to increase the productivity in ourmill and to reduce availing of casual leave, theremaining days of Casual Leave of every year will becalculated according to ratio and will be disbursed tothe seasonal workers at the end of the first month inthe next year. The above rule will not apply for thosewho are going on leave in loss of pay.The above rule comes into force from 66-67 forseasonal workers and from January 1967 for thepermanent workers."8. In the meeting of the Chief Executives at the Tamil Nadu Co-operative Sugar Federation, which was held on 3/4.6.1994, by Clause3.6, it was decided that the Mills may introduce the scheme forencashment of unavailed casual leave by the employees. However, therebeing a scheme already existing since 1967, no separate introduction ofsuch Scheme was required for the appellant-Ambur Co-operative SugarMills. However, it appears that giving reference to Chief Executives'meeting, dated 3/4.6.1994, by letter No.3953/94-BI, dated 19.8.1994,the appellant-Sugar Mills requested Commissioner of Sugar, Departmentof Sugar, Government of Tamil Nadu, permission to allow the clericalstaff including the supervisory staff common cadre officers to encashthe unavailed casual leave at their credit as on the last day of theyear. The Commissioner of Sugar, Department of Sugar, Government ofTamil Nadu, Chennai, by his Rc.No.32429/C3/94, dated 24.12.1994, givingreference to the said letter dated 19.8.1994 and Chief Executives'meeting held on 3/4.6.1994, informed that the decision to grant suchbenefit appears to have been taken to avoid over time payment, as per https://hcservices.ecourts.gov.in/hcservices/ the Chief Executives' meeting held on 3/4.6.1994 and as over timepayment was given only to the factory workers and not to the employeesworking in the administrative section, and therefore, the clericalstaff were not eligible for encashment benefit of casual leave.Similarly, the supervisory staff working in the factory who do not getWage Board Scale of Pay were also not eligible (Common Cadre Officers)for encashment of C.L. Relevant portion of the said letter dated24.12.1994 is extracted hereunder:"In the Chief Executives meeting held on 3.6.94 and4.6.94 it was decided to permit the employees to encashtheir unavailed casual leave only to avoid overtimepayment. 2. In the letter cited, you have requestedpermission to allow the clerical staff including thesupervisory staff Common Cadre Officers, to encash theunavailed C.L. at their credit as on the last day of theyear. In this connection, it is informed that only toavoid overtime payment, workers have been permitted toencash their unavailed C.L. Overtime payment is givenonly to the factory workers and not to the employeesworking in the administrative section. Therefore theclerical staff are not eligible for encashment benefitof C.L. Similarly the supervisory staff working in thefactory who do not get Wage Board Scale of Pay are alsonot eligible (Common Cadre Officers) for encashment ofC.L.3. The receipt of the letter may be acknowledged."9. Subsequently, giving reference to the said letter dated24.12.1994, the Joint Secretary to Government, Industries Department,Government of Tamil Nadu, vide letter dated 30.3.1995, informed theCommissioner of Sugar that the grant of benefit of encashment ofunavailed casual leave, was permitted by Ambur Co-operative SugarMills to its factory workers, as referred to in letter dated24.12.1994, and forwarded to all other Co-operative Sugar Mills, willencourage other Co-operative Sugar Mills to follow suit. It was furtherinformed that surrender of unavailed casual leave is an unheard-of-concept and the Commissioner of Sugar is not competent to issue suchcircular without the knowledge and concurrence of the Government andthat the employees of other Public Sector/Co-operative Institutions mayalso start demanding this concession and thereby asked the Commissionerof Sugar to withdraw the Circular dated 24.12.1994, as will be evidentfrom the letter of the Joint Secretary to Government, dated 30.3.1995,and quoted hereunder:"I am to invite your attention to thereference cited wherein the factory workers ofAmbur Cooperative Sugar Mills have been permittedto surrender unavailed Casual Leave by yourpredecessor and a copy of the reference has been https://hcservices.ecourts.gov.in/hcservices/ marked to all other Co-operative Sugar Mills. Thiswill encourage other Co-operative Sugar Mills tofollow suit. Needless to say, surrender of unavailed CasualLeave is an unheard-of-concept and the Commissionerof Sugar is not competent to issue such a circularwithout the knowledge and concurrence of theGovernment. Employees of other PublicSector/Cooperative institutions may also startdemanding this concession.I am, by direction, to request you to withdrawthe above circular and also clarify to allCooperative Sugar Mills that no one will beeligible for surrender of unavailed Casual Leave. Acopy of your circular to all Cooperative SugarMills may be sent to Government for favour ofinformation." 10. It is only thereafter the Commissioner of Sugar issued theimpugned order contained in Circular dated 10.5.1995 and informed allthe Co-operative and Public Sector Sugar Mills that the scheme withregard to the encashment of unavailed casual leave by the workers ofCo-operative and Public Sector Sugar Mills, was withdrawn withimmediate effect, relevant portion of which is quoted hereunder:"2. In the reference third cited, Government haveinstructed to withdraw the above scheme. In view ofthe above, the implementation of the scheme ofencashment of unavailed casual leave by the workers ofCooperative and Public Sector Sugar Mills is herebywithdrawn with immediate effect."11. The aforesaid Scheme framed by Ambur Co-operative Sugar Mills,the decision of the Chief Executives held in the meeting on 3/4.6.1994,the letter of the Commissioner of Sugar, dated 24.12.1994, theGovernment Letter issued from the Industries Department by the JointSecretary to Government, dated 30.3.1995 and the impugnedorder/Circular dated 10.5.1995, relevant portion of all of which havebeen quoted above to show complete non-application of mind on the partof the respondents and their officials.12. It will be evident that the appellant-Ambur Co-operative SugarMills Ltd., of their own, as back as on 3.4.1967, decided to grant thebenefit of encashment of casual leave to its permanent workers andseasonal workers. Subsequently, in the meeting of the Chief ExecutiveOfficers of the Tamil Nadu Co-operative Sugar Federation, held on3/4.6.1994, a general decision was taken that Co-operative Sugar Millscan grant the benefit of encashment of unavailed casual leave. Theworkmen of the appellants-Ambur Co-operative Sugar Mills Ltd., were https://hcservices.ecourts.gov.in/hcservices/ already availing of the benefit of encashment of unavailed casual leavesince 1967, but as the same was not applicable to the clerical staff orto the supervisory staff of the appellant-Ambur Co-operative SugarMills Ltd., the appellant-Ambur Co-operative Sugar Mills Ltd., by theirletter dated 19.8.1994, wanted permission from the Commissioner ofSugar to allow the clerical staff including the supervisory staffcommon cadre officers, to encash the unavailed casual leave at theircredit as on the last day of the year. In this connection, as per thedecision of the Chief Executives' meeting held on 3/4.6.1994, theCommissioner of Sugar, by letter dated 24.12.1994, informed that it wasdecided to permit the employees to encash their unavailed casual leaveonly to avoid overtime payment and the clerical staff being notworkmen of the factory, were not eligible for encashment of casualleave.13. From the aforesaid facts, it would be evident that theGovernment have not framed any Scheme for encashment of casual leave.But the appellant-Ambur Co-operative Sugar Mills Ltd., was giving suchbenefit to the workmen since 1967. But the Joint Secretary toGovernment, from its Industries Department, while issuing the letterdated 30.3.1995, by referring to the letter dated 24.12.1994 of theCommissioner of Sugar, treated the said letter dated 24.12.1994 as if ascheme of the State Government granting the benefit of encashment ofunavailed casual leave to the workmen and thereby, directed to withdrawthe letter/circular dated 24.12.1994. Pursuant to the said letter dated30.3.1995 of the Joint Secretary to the Government, the Commissioner ofSugar issued the impugned order/Circular, dated 10.5.1995 and simplywithdrawn the benefit of encashment of unavailed casual leave grantedto the workmen. Thus, it will be evident that there was no scheme ofthe State Government except a decision of the appellant-Ambur Co-operative Sugar Mills Ltd., of their own to grant the benefit ofencashment of unavailed casual leave. The correspondence dated24.12.1994 between the Commissioner of Sugar and the appellant-AmburCo-operative Sugar Mills Ltd., not to grant such benefit of encashmentof unavailed casual leave, to the clerical and supervisory staff, wasnoticed and on a wrong presumption that a scheme has been framed by theGovernment for encashment of casual leave, the benefit granted to theworkmen of the appellant-Ambur Co-operative Sugar Mills Ltd., has alsobeen withdrawn, and the impugned order/Circular dated 10.5.1995 waspassed by the Commissioner of Sugar. 14. The learned single Judge has not referred to all the aforesaidfacts and letters. Therefore, we have deliberated on them and find nomerits in the appeals of their own. This apart, we uphold the impugnedcommon order dated 1.8.2002 passed by the learned single Judge in WritPetition Nos.12503 to 12505 of 1995, as the learned single Judgerightly applied the ratio laid down by the Supreme Court in the case of"Workmen of Kettlewell Bullen and Co. Ltd. vs. Kettlewell Bullen andCo. Ltd." reported in AIR 1994 SC 1550 (supra) and came to the https://hcservices.ecourts.gov.in/hcservices/ conclusion that the impugned order/Circular dated 10.5.1995 passed bythird respondent-Commissioner of Sugar, was bad. However, we make itclear that the order of the learned single Judge or the presentjudgment will not be applicable to the Sugar Co-operative Societies,including the Public Sector Sugar Mills, where there is no separateScheme framed by such Sugar Co-operative Societies/Public Sector SugarMills.15. There being no merits, all the Writ Appeals are dismissed, butthere shall be no order as to costs. W.A.M.Ps. are closed.Sd/Asst.Registrar/true copy/Sub Asst.RegistrarcsTo1. The Government of Tamil Nadu, rep. by its Secretary, Food Cooperation and Consumer Protection, Fort St.George, Madras-9.2. Commissioner of Sugars, 474, Anna Salai, Nandanam, Madras-35. +1cc to Mr.A.V.Bharathi,Advocate Sr 2218+1cc to Mr.N.Balasubramanian, Advocate Sr 2074SR (CO)km/28.1.Writ Appeal Nos.67 to 69 of 2006