2008 BST Manufacturing Ltd v. State of Haryana & Ors.

customs. When the Management refused to negotiate with the answering respondent about the settlement for the year 1987-1988, the latter was compelled to give a demand notice and called for a token strike. The petitioner- Company did not intimate/ inform the answering respondent about the change of their accounting year, nor any notice in this regard was given to them. Previously, also the accounting year of the petitioner- Company was from March to March and in spite of that it paid the bonus to the employees on the festival of Diwali. Since the Management refused to arrive at a settlement for the payment of bonus for the year 1987-1988, in spite of their token strike notice, the answering respondent was compelled to go on indefinite strike of which notice was given by the answering respondent. The labour authority had called various meetings in which the petitioner- Company had taken a very hard stand that they will not pay more than statutory bonus and the same will be paid after completion of their accounting year. The strike of the workmen was peaceful and that is why, the police has not registered any case against them. The petitioner- Company made various false complaints against the workers to the police for making ground to declare lock- out. The petitioner- Company did not give any notice to the answering respondent before declaring the lockout on C.W.P. No.166 of 1989 -8-

11.11.1988 which is a contravention of the provisions of the Act. In the letter dated 3.12.1988 written by the petitioner to the answering respondent, the former had put several conditions/ demands for lifting the lockout. Lastly, it has been prayed that this petition be dismissed with costs. I have heard the learned counsel for the parties, besides perusing the record with due care and circumspection. Mr. Arun Nehra, Advocate appearing on behalf of the petitioner urged with a good deal of force that the exercise of power under Section 10 (3) ibid by the State Government is illegal and unlawful as the reference dated 30.12.1988 is itself illegal and the same has been made without application of mind. It was conveyed by the petitioner to all the respondents that there can be no question of there being any dispute with regard to bonus for the accounting year 1987-1988 as the accounting year had itself not come to an end and the same was to come to an end only on

31.3.1999 in consonance with the amended Income Tax Act, 1961. Therefore, there could have been no reference of any purported dispute much less a dispute as to whether the workman would be entitled to payment of 8.33% bonus or more for an accounting year, which had not even come to an end. The lock-out was not declared pursuant to the disputes relating to the alleged dispute pertaining the payment of wages to the workmen for strike/ lock-out period and a deduction of eight days wages by the Management for the strike period. The purported dispute could not have been referred unless the Government came to a definite conclusion as to whether there was a strike or lockout. The power under Section 10(3) ibid has been exercised by the State Government with a view to illegally pressurize the Management of the petitioner- Company to give up its lawful C.W.P. No.166 of 1989 -9- right of declaring a lockout. The impugned prohibitory order dated

30.12.1988 is malafide inasmuch as, the condition precedent of existence of reference as per the provisions of Section 10(3) ibid was artificially created as the same did not exist. There could not have been any dispute warranting a reference in respect of payment of bonus at any rate for the accounting year 1987-1988, which had not yet come to an end. The lock-out was declared pursuant to an illegal strike. The same is specifically recognised as a legal lockout by the provisions of Section 24(3) of the Act. That despite persistent requests of the petitioner- Company, respondents No.1 and 2 did not hold a single conciliation meeting. The exercise of the discretionary power by the State Government- respondent in this situation was wholly unwarranted and is actuated by extraneous considerations and motives. That it is a legal right of the petitioner to declare a lockout, the legality and justifiability of which can be adjudicated upon by a Court or Tribunal of competent jurisdiction.

The impugned prohibitory order is illegal as the same has been passed in violation of natural justice without affording any opportunity to the petitioner to justify its action and the impugned order constitutes an unwarranted impairment of legal right vested in the petitioner- Company. He has sought to place abundant reliance upon the observations rendered in re: A.K. Kallappa Chettiar & Sons, Ernakulam, v. State of Kerala, 1970 ILLJ 97, wherein it has been held that an order under Section 10(3) of the Act cannot be passed without giving a reasonable opportunity to all those who would be affected by the same to state and establish their case. Further relying upon Malayalam Plantations (India) Ltd., and another v. Workmen of Kaliyar Estate and others, 1984 ILLJ 247, he C.W.P. No.166 of 1989 -10- maintained that in these premises, Annexure P.9 as well as P.10 are liable to be quashed. Mr. Nehra stressing his every nerve further agitated at the bar that Mr.

M.L.Jain r/o Jain Street, Ganaur Mandi, District Sonepat, son of S.R.Jain has solemnly affirmed in his affidavit dated 9.12.2008 that in the meantime, matter before Hon'ble the Delhi High Court was pending, wherein fact of permission to close the unit by BIFR was considered and during the winding up proceedings, it was ordered by Hon'ble Delhi High Court on the basis of a compromise arrived at between the parties that Management will pay 25 days' wages per year for the period from 1988 till date of winding up order and the orders were passed by the aforesaid Court on 7.12.2004 confirming the above said facts and thus in a way, the matter was resolved by the order of Hon'ble Delhi High Court and the workmen other than who have taken their full and final dues have moved an application before Hon'ble Delhi High Court for reconsideration of the matter, but their application has not been decided so far and that the bonus was declared and paid at the rate of 8.33% to all 506 workmen for the year 1986-1987 and 1987-1988 and the remaining 206 workmen are agitating their claim before the Industrial Tribunal, Panipat, where the matter is now fixed for arguments on 6.1.2009 and in view of this affidavit, the hearing of this petition may be postponed.

To tide over these submissions, Ms. Abha Rathore, Advocate representing the Union- respondent urged with great eloquence that the rights of the workmen can only be crystalized, if the industrial adjudication arising out of the lock-out and illegal termination of the workmen is adjudicated and taken to its logical conclusion and once their rights are C.W.P. No.166 of 1989 -11- crystalized, it would be easier to press their claims before the Company Court in Hon'ble Delhi High Court. I have given a deep and thoughtful consideration to the respective submission. As is borne out from the record, the operation of Annexure P.9 was stayed way-back in the year 1989. In view of this stark fact coupled with the submission made by Ms. Abha Rathore, it would not be in the fitness of things to postpone the hearing of this matter. Primarily, it is to be adjudicated as to whether the doctrine of `Audi Alteram Partem comes into play in the exercise of the power vested in the State Government under Section 10(3) ibid.

To my mind, its answer must be in the negative insofar as the facts of the instant case are concerned. As alleged by the petitioner, there was a constant threat to the lives and safety of Personnel and on finding no assistance whatsoever from the labour authorities, the petitioner to protect its properties and lives of its personnel was compelled to declare a lock-out and so much so, the matter was also reported to the police authorities which in turn, did not galvanize. This plea in the absence of any cogent evidence is very difficult to be swallowed. The Union has put forth that it was a peaceful strike. All the three respondents in their respective written statements have taken up an identical stand that due to the adamant attitude of the Management, the conciliation meetings fizzled out. If the workmen had gone to the extent to cause damage to the petitioner's properties or the Union had held out threats to the workmen that they as well as the members of their family will face the dire consequences, if they resumed work, in that eventuality, by all probabilities the police authorities would have certainly registered the cases against the erring Union or the workmen.

If the Police Officer at the lowest rung had turned a C.W.P. No.166 of 1989 -12- deaf ear to the requests of the Management, in that latter would have definitely approached the higher authorities of the Police hierarchy. There being no evidence, it is very difficult to say that the workmen or Union had gone to the stated extent. The Union has come up with a specific plea that indeed to justify the declaration of lockout, such versions have been coined up. The dispute was merely on the payment of bonus on the eve of Diwali festival. The Union has also egged that this festival allowance is being paid for the last 20 years. In the present case, if the State Government had not issued the order prohibiting the lockout, there could be every possibility of the situation taking an ugly turn. To obviate a chaos or an unruly situation, the Government herein had to take immediate action. The law does not envisage that the Government before passing a prohibitory order in such a situation is obligated to issue a show cause notice to the authorities.

Thus, the doctrine that no-one should be condemned unheard was not required to be followed by the State Government in the instant case. For my this view, I also derive support from the following observations rendered in re: Mysore City Powerloom and General Workers' Association, Mysore v. State of Karnataka and another, 1984 Labour and Industrial Cases 1735:- “I am of the opinion that having regard to the nature and purpose of the power conferred under sub-section (3) of Section 10 of the Act, by necessary implication the application of rules of natural justice stands excluded. The power conferred under the sub-section is such as would call for an immediate action, on the part of the Government in order to ensure industrial peace, of prohibiting a lockout or strike, as the C.W.P. No.166 of 1989 -13- case may be, when the dispute, in connection with which the lockout or strike was resorted to, had been referred by the appropriate Government for industrial adjudication.

To insist on compliance with the Rule of audi alteram partem before passing an order under sub-section (3) of Section 10 is plainly contrary to the common sense of the situation and would make the provision lifeless and would defeat the purpose of the provision.” Further in re: Eenadu Press Workers Union and another v. Government of Andhra Prpadesh and another, 1979 ILLJ 391, it has been held as under:- “It is not necessary that the Government should issue a show- cause notice to the parties before passing an order under S.10 (3) prohibiting strikes and lock-outs. It is true that the right to strike is a valuable right in the hands of the employees but at the same time it is well-settled it is not fundamental right. Requirements of principles of natural justice depended upon the circumstances of each case and no hard and fast rule can be laid down. In re: Harish Bijaykumar Khaitan and another v.

State of Maharashtra and others, 1987 Labour Industrial Cases 836, it has been held as under:-

One of the salient provisions of the Industrial Disputes Act is to prevent illegal strikes and lockouts. With a view to prevent illegal strikes or lockouts in order to maintain industrial peace whenever the Government acts, it acts administratively and it C.W.P. No.166 of 1989 -14- would not be reasonable and prudent in such situations to issue show cause notice and hear the concerned parties. It is difficult to appreciate that just because Government passes prohibitory order under S.10(3) that civil consequences may follow. Therefore, it is not necessary for the Government to hear the parties before passing such an order. No principles of natural justice can be said to be violated in such matters. Thus, where in a reference under S.10(3) the State Govt. passed an order prohibiting lockout which was very much connected with dispute relating to general demands of the employees which was referred, it was not necessary for Govt. to hear parties before passing such an order.

In re: A.P. Electrical Equipment Corporation v.

A.P. Electrical Equipment Corporation Staff Union and others, 1987 ILLJ 324, it has been observed as under:-

If prior opportunity is given, the very object of restoring industrial peace would be jeopardised and it will be a self- defeating one. Under these circumstances, though disobedience thereof visits with penal consequences, no prior notice need be given to the petitioner.

In the case at hand, the very purpose for issuing the impugned prohibitory order was to meet an emergency in which such power has to be exercised expeditiously. As observed in re: A.P. Electrical Equipment Corporation (supra),

It is well settled that the exercise of the right of lock-out is an instrument of coercion or weapon of reprisal in the hands of the Management. Therefore, the possibility to create artificial circumstances C.W.P. No.166 of 1989 -15- as a justification for lock-out cannot be ruled out.

The very object of prohibiting continuance of lockout is to restore industrial peace, calm and harmony while industrial adjudication is in progress.

The action under Section 10(3) is only a preventive one. There being no cogent, convincing and luculent evidence to the effect that the workmen or the Union had resorted to hooliganism, rukus or rumpus in the alleged manner, the possibility to create artificial circumstances as a justification for lockout cannot be ruled out. It boils down from the above discussion that in existent situation, respondents No.1 and 2 were not required to afford an opportunity of being heard to the petitioner- Company before passing the impugned orders. It is own plea of the petitioner in the petition that the subject-matter of the demand raised by respondent No.3- Union by its letter dated

27.10.1988 was already the subject-matter of the aforesaid pending reference. Section 10(3) of the Act reads as under:-

Where an industrial dispute has been referred to a Board, [Labour Court, Tribunal or National Tribunal] under this section, the appropriate Government may by order prohibit the continuance of any strike or lock-out in connection with such dispute which may be in existence on the date of the reference.

It has been manifested in the above language in plain words that in the situation as did exist in the present case, the State Government could prohibit the continuance of lock-out as the Industrial Tribunal was already seized of the matter. In the ultimate analysis, it follows that the impugned orders call for no interference in the exercise of writ jurisdiction. Sequelly, this petition is dismissed. However, to sound a note of caution, it is clarified C.W.P. No.166 of 1989 -16- that the Industrial Tribunal being already seized of the matter, in no manner, shall be influenced by the observations made in this judgment, if it happened to decide the question regarding justification as to the declaration of lockout or the strike. December 18, 2008 ( HARBANS LAL ) JUDGE Whether to be referred to the Reporter? Yes/No