Uttarakhand Ltd. (SIDCUL) v. Shri Chhote Lal others

1 Civil Writ Petition No. 250 (M/S) of 2013-----The State Infrastructure and Industrial Development Corporation of Uttarakhand Ltd. (SIDCUL) vs Shri Chhote Lal & others Ashish Naithani J. Department, pursuant to directions issued by the Board for Industrial and Financial Reconstruction (BIFR). Thereafter, the Government of Uttarakhand introduced a Voluntary Retirement Scheme (VRS) on 6 December 2004, and the respondent-workman accepted the scheme and received a payment of ₹1,92,000/-.

4. However, the respondent claimed that this amount lacked any breakup and was not in full settlement of his dues. He alleged that he continued to work until 12 January 2005 and was not paid any salary from 1 April 2001 to 12 January 2005. He claimed wages at the rate of ₹3,200/- per month, earned leave encashment of ₹11,568/-, and bonus of ₹16,874/-, totalling ₹1,73,917/-

5. The Labour Court, after examining the evidence, accepted that Chhote Lal had continued to work in a limited cleaning capacity after the mill’s closure. While the court denied his claim for earned leave and bonuson the ground that the work done was not full-time in a functioning industrial unitit held that the applicant was entitled to salary at the rate of ₹3,200/- per month for the period from 1 April 2001 to 12 January 2005, amounting to ₹1,45,475/-

6. The court passed an award to this effect on 13 July 2012, directing SIDCUL, which had taken over the assets and liabilities of the mill, to pay the said amount within 30 days. A review petition filed by SIDCUL was dismissed on 14 December 2012. Thereafter, recovery proceedings were initiated.

7. SIDCUL challenged this award before the High Court, contending that Chhote Lal had accepted the VRS with full and final settlement of all dues based on the cut-off date of 31 March 2001 and had submitted an affidavit to that effect. It was argued that any claim post that date was untenable in law, especially given binding decisions of this Court and 2 Civil Writ Petition No. 250 (M/S) of 2013-----The State Infrastructure and Industrial Development Corporation of Uttarakhand Ltd. (SIDCUL) vs Shri Chhote Lal & others Ashish Naithani J. the overriding provisions of the Sick Industrial Companies (Special Provisions) Act, 1985 (SICA).

8. Heard learned counsel for the parties and perused the records.

9. Learned counsel for the applicant, Shri Chhote Lal, submitted that the applicant had been a permanent employee of the UPSTCL Spinning Mill, Jaspur, since 1978 and had served as a sweeper throughout.

10. It was contended that although production at the mill ceased on 17 October 1998, the applicant continued to discharge his duties by maintaining cleanliness in the Officer Colony, Labour Colony, and Mill Office, where several staff members and security personnel continued to reside.

11. It was argued that no formal termination communication was issued to the applicant, and he continued to work on the express instruction of the mill officials until 12 January 2005.

12. It was submitted that during this entire period, the applicant's presence was duly marked in the time office and was certified by mill functionaries, including through a certificate issued on 01 September 2004 acknowledging his engagement as a sweeper from January 2002.

13. Further, the applicant was never furnished any detailed breakup of the amount received under the Voluntary Retirement Scheme (VRS), and there was no specific waiver or release of post-closure dues.

14. Counsel argued that merely accepting a VRS amount does not preclude an employee from seeking legitimate dues for services rendered thereafter, particularly the absence of express relinquishment.

15. In support of his claim under Section 33-C (2) of the Industrial Disputes Act, it was urged that the applicant was entitled to wages from 1 April 2001 to 12 January 2005, amounting to ₹1,45,475/-, along with 3 Civil Writ Petition No. 250 (M/S) of 2013-----The State Infrastructure and Industrial Development Corporation of Uttarakhand Ltd. (SIDCUL) vs Shri Chhote Lal & others Ashish Naithani J. earned leave encashment of ₹11,568/- and bonus of ₹16,874/-, aggregating to ₹1,73,917/-

16. It was emphasized that the applicant's claim was grounded in actual services rendered post-closure and not for any notional or retrospective liability.

17. It was also argued that the proceedings under Section 33-C (2) being in the nature of computation and recovery, the jurisdiction of the Labour Court was rightly invoked.

18. Learned counsel for the petitionerSIDCUL submitted that the respondent-workman had accepted the Voluntary Retirement Scheme (VRS) floated by the Government of Uttarakhand, based on the deemed date of closure of the Jaspur Spinning Mill as 31 March 2001.

19. It was contended that the respondent received full and final settlement under the scheme and executed an affidavit confirming he had no further claims against the employer.

20. It was further argued that the documents relied upon by the respondent, including a certificate dated 01 September 2004, were not issued by any competent authority and could not establish continued employment. SIDCUL maintained that since UPSTCL was declared a sick company under SICA and proceedings were pending before BIFR, any claim for recovery post-closure was barred under Section 22 of the Act and beyond the jurisdiction of the Labour Court.

21. Upon careful consideration of the pleadings, documents on record, and the rival submissions, this Court finds that the central issue for determination is whether the respondent-workman, Shri Chhote Lal, continued to remain in employment of the spinning mill after the deemed date of closure, i.e., 31 March 2001, and whether he is entitled to wages for the period thereafter till 12 January 2005. 4 Civil Writ Petition No. 250 (M/S) of 2013-----The State Infrastructure and Industrial Development Corporation of Uttarakhand Ltd. (SIDCUL) vs Shri Chhote Lal & others Ashish Naithani J.

22. The Court notes that the respondent had been employed as a sweeper in the UPSTCL Spinning Mill, Jaspur, and continued to perform duties such as cleaning the officer and labour colonies even after production had ceased in 1998. The evidence on record includes a certificate dated 01 September 2004 issued in his favour, indicating that he was engaged in the mill premises from January 2002.

23. Additionally, partial attendance records from 2000 to 2003 were produced. These documents support the assertion that the respondent was rendering services, albeit informally, during this period. The employer has not rebutted this evidence with any documentary proof to demonstrate that he was not working during the claimed period or that his services had been formally terminated.

24. However, the Court also notes that a consensus was reached among the Government, labour unions, and other stakeholders in a meeting chaired by the District Magistrate on 01 July 2003, wherein 31 March 2001 was agreed upon as the cut-off date for closure of the mill. This decision was duly recorded in the proceedings of the BIFR.

25. It is further not in dispute that the respondent accepted benefits under the Voluntary Retirement Scheme floated by the State Government on 06 December 2004, pursuant to which he received ₹1,92,000/- and executed an affidavit stating that he had no remaining claims. Yet, the absence of a detailed breakup of that payment and the lack of any evidence that it covered post-closure services render the full and final nature of that settlement doubtful in the present context.

26. The Labour Court correctly distinguished between compensation under the VRS and wages for services rendered. The oral testimony of the respondent remained consistent and unrebutted in material particulars. The fact that staff and security remained housed in the 5 Civil Writ Petition No. 250 (M/S) of 2013-----The State Infrastructure and Industrial Development Corporation of Uttarakhand Ltd. (SIDCUL) vs Shri Chhote Lal & others Ashish Naithani J. colony and that some ongoing maintenance adds credibility to the respondent’s case.

27. Moreover, the employer’s own witness admitted that guards had been appointed to maintain the premises during the same period, which supports the inference that the establishment. However, shut in terms of production, continued to engage in minimal services.

28. Accordingly, while this Court finds no infirmity in the Labour Court's rejection of the claims for earned leave encashment and bonusgiven that no industrial activity or statutory entitlement existed for such heads after closureit finds no ground to disturb the Labour Court’s finding that the respondent did render services post 31 March 2001 and is entitled to wages at the last drawn rate of ₹3,200/- per month for the period up to 12 January 2005.

29. The Court has carefully considered the relevant legal framework and guiding judicial precedents in determining the respondent's entitlement. The jurisdiction under Section 33-C(2) of the Industrial Disputes Act, 1947, is limited to the computation of benefits arising from a pre- existing right.

30. In the present case, the Labour Court rightly held that the respondent’s claim was not like a fresh industrial dispute but pertained to remuneration for services actually rendered. The Supreme Court in Municipal Corporation of Delhi v. Ganesh Razak (1995) 1 SCC 235 has clarified that where the foundational facts of entitlement are undisputed or evidenced, Section 33-C(2) can be invoked for computation of benefits.

31. While the petitioner sought shelter under the provisions of the Sick Industrial Companies (Special Provisions) Act, 1985, particularly Section 22 which bars legal proceedings against a sick company without prior BIFR consent, it is well-settled that this embargo does not extend 6 Civil Writ Petition No. 250 (M/S) of 2013-----The State Infrastructure and Industrial Development Corporation of Uttarakhand Ltd. (SIDCUL) vs Shri Chhote Lal & others Ashish Naithani J. to proceedings concerning post-closure labour for services rendered outside the core industrial function, particularly when the company has ceased to operate as a commercial undertaking.

32. The High Court’s earlier judgment in M.C. Nainwal& Others v. State of Uttarakhand & Others (Writ Petition No. 78 of 2006) was relied on by the petitioner to argue that once the cut-off date under the VRS is accepted, no further claims survive. However, the said decision is distinguishable, as the claimants therein had not shown any evidence of post-closure work, nor did they contest the finality of the settlement. In contrast, the respondent herein substantiated his continuous engagement through documents and consistent testimony.

33. In balancing the equities, the Court notes that the respondent was not in full-time industrial employment but was engaged in peripheral and essential services such as cleaning and upkeep, which were necessary for the habitation of mill staff and safeguarding assets. The work admittedly rendered was limited in scope, and the claim is limited only to basic wages. The respondent’s antecedents reflect continued association with the establishment without any adverse record.

34. Moreover, the delay in formally terminating his services, despite de facto closure, further tilts the balance in favour of compensating him for actual labour rendered. Considering the modest quantum involved and the prolonged pendency of the matter, the claim is not disproportionate or unjust.

35. In view of the above discussion and for the reasons stated herein, this Court does not find any manifest illegality or perversity in the award passed by the Labour Court, Kashipur, dated 13 July 2012, directing the petitioner-SIDCUL to pay the respondent-workman a sum of ₹1,45,475/- towards wages for the period from 1 April 2001 to 12 January 2005. The Labour Court has correctly appreciated the facts and 7 Civil Writ Petition No. 250 (M/S) of 2013-----The State Infrastructure and Industrial Development Corporation of Uttarakhand Ltd. (SIDCUL) vs Shri Chhote Lal & others Ashish Naithani J. applied the law, holding that the claim for wages was founded on actual services rendered post-closure and that the jurisdiction under Section 33-C(2) of the Industrial Disputes Act, 1947, was rightly invoked. ORDER Accordingly, the writ petition is dismissed. The award dated 13 July 2012 is upheld. The amount due to the respondent-workman shall be paid within eight weeks from the date of this order, failing which the amount shall carry interest at the rate of 6% per annum from the date of this order till the date of actual payment. No order as to costs. Dated:10.06.2025 NR/ Ashish Naithani, J. 8 Civil Writ Petition No. 250 (M/S) of 2013-----The State Infrastructure and Industrial Development Corporation of Uttarakhand Ltd. (SIDCUL) vs Shri Chhote Lal & others Ashish Naithani J.