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L.H. Sugar Factories and Oil Mills (Private) Ltd. Vs. State of Uttar Pradesh and ors. - Court Judgment

LegalCrystal Citation
SubjectLabour and Industrial
CourtAllahabad High Court
Decided On
Case NumberCivil Misc. Writ No. 755 of 1961
Reported inAIR1962All70; [1961(2)FLR421]; (1961)ILLJ686All; (1963)ILLJ340All
ActsIndustrial Disputes Act, 1947 - Sections 10, 15 and 17; Constitution of India - Article 226; Uttar Pradesh General Clauses Act - Sections 21
AppellantL.H. Sugar Factories and Oil Mills (Private) Ltd.
RespondentState of Uttar Pradesh and ors.
Advocates:Shanti Bhusan, Adv.
(i) labour and industrial - unfair labour practice - sections 15 and section 17 of industrial disputes act, 1947 - promotion without merit of workers and one set of workers - disputed workmen - power of tribunal - award of emolument and privileges to disputed worker.  (ii) affidavits - writ - article 226 of constitution of india - entitled to oath - held, person who is acquainted with the facts deposed to in his affidavit.  (iii) reference of dispute to tribunal - section 10 of industrial disputes act, 1947 - government has power to change the decision - res-judicata not applicable.  - cantonments act[c.a. no. 41/2006]. section 346 & cantonment fund (servants rules, 1937, rules 13, 14 & 15: [h.l. gokhale, ag. cj, p.v. hardas, naresh h. patil, r.m. borde & r.m. savant, jj].....orders.s. dhavan, j.1. this is a petition by the l.h. sugar factories and oil mills limited, pilibhit under article 226 of the constitution challenging the legality of an award made by the labour court bareilly, holding that the petitioner company had wrongfully and unjustifiably deprived ten workmen of promotion to the post of driver-cum-assistant fitter and further declaring these workmen entitled to the same emoluments and increment in their salary and to the same terms of employment which had been given to eleven other workmen who had been preferred in the matter of promotion. all the ten workmen are respondents in the petition, the other respondents being the labour court, bareilly, the state of uttar pradesh and the workmen of the company represented by the pilibhit sugar mill.....

S.S. Dhavan, J.

1. This is a petition by the L.H. Sugar Factories and Oil Mills Limited, Pilibhit under Article 226 of the Constitution challenging the legality of an award made by the Labour Court Bareilly, holding that the petitioner company had wrongfully and unjustifiably deprived ten workmen of promotion to the post of driver-cum-assistant fitter and further declaring these workmen entitled to the same emoluments and increment in their salary and to the same terms of employment which had been given to eleven other workmen who had been preferred in the matter of promotion. All the ten workmen are respondents in the petition, the other respondents being the Labour Court, Bareilly, the State of Uttar Pradesh and the Workmen of the company represented by the Pilibhit Sugar Mill Labour Union. The facts as alleged in the affidavit supporting the petition are related in the following paragraph. But I would like to make a few comments on this affidavit. It is sworn by a person of the name of Ram Gopal Agarwal who describes himself as a clerk in the employment of the company. He had verified the allegations as true to his personal knowledge, but this is hard to believe.

If a person swears an affidavit in a case which does not concern him. it is not enough for him to make the formal verification that he is personallyacquainted with the facts deposed to in his affidavit: he must explain how he became acquainted with events and happenings which ordinarily did not appear to concern him. Ram Gopal states that he is a clerk of the company, but he does not state that he was dealing with the matters which lead to the dispute and the award, nor was learned counsel in a position to make this statement on a question from the Court. The official directly responsible for the promotions was either the Chief Engineer Or the Assistant Engineer of the Company. There is no affidavit by either of them nor by any official or director or labour officer of the Company. It appears that the petitioner company picked a clerk and sent him here for the purpose of swearing an affidavit without ascertaining that he could swear to the material facts from personal knowledge. This practice among institutions of asking a minor employee to swear the affidavit as a matter of formality must be condemned.

This Court has emphasised again and again that the affidavit supporting a petition under Article 226 must be sworn by a person who Can, relate facts from his personal knowledge, It is true that Ram Gopal has verified his allegations as true to his knowledge, but the matters referred to in his affidavit do not ordinarily concern a clerk and in is doubtful that his verification is true. The affidavit being worthless, the petition could have been rejected on this ground alone, but I heard learned counsel for the petitioner in view of the importance of some of the questions of law raised by him.

2. The allegations are these. The petitioner company owns' and operates a sugar factory in Pilibhit in which a large number of workmen are employed. The ten workmen who are the respondents in this case were engaged as drivers along with many others. Of these others, eleven, who were also drivers and had worked as assistant fitters during the three previous off seasons, were appointed as driver-cum-assistant fitters on the recommendation, of the Chief Engineer for the off season of 1957. This had the consequence of raising their salaries. The other ten workers (the respondents in this petition) raised a dispute over these promotions which was referred to the Regional Conciliation. Officer of Bareilly. He made an inquiry and submitted his report to Government. However, the latter made no reference to the Industrial Tribunal for adjudication and the dispute did not proceed further. This happened in 1957.

3. In August 1958 the dispute flared up again when the eleven workmen were confirmed in their appointments as driver-cum-assistant fitters--in other words, made permanent The company (or rather its clerk Ram Gopal Agarwal) alleges that they were selected because they were efficient and suitable for their posts. Apparently, the other ten workers took a different view and thought that they had been passed over and victimised for their trade union activities and lodged a complaint to the Regional Conciliation Officer. He made an inquiry and submitted his report. This time the Government took a different attitude to the dispute and referred it for adjudication to the Labour Court, Bareilly. The question referred was in these terms:

'Whether the employers have wrongfully and/or unjustifiably deprived their workmen, mentioned in the Annexure, of promotion on the post of Driver-cum-Assistant Fitter with effect from August 1, 1957? If so, to what relief are the workmen entitled and with what details?'

In the inquiry, the employer raised a preliminary, objection that the reference was invalid as it related to a matter in which government had already refused to make a reference, and the matter could not be re-opened. On merits the petitioner company pleaded that the question of promotion was within the exclusive discretion of the management and the Labour Court could not overrule its decision. The Labour Court rejected the preliminary objection and heard the case on merits. It framed the following issues :

1. Whether the workmen concerned were considered for the purposes of promotion as driver-cum-assistant fitters? If not, why not?

2. Whether the workmen concerned were senior to and more efficient and suitable for promotion than those promoted?

3. Whether the workmen concerned were denied promotion because they were members of the P. S. M. Labour Union?

4. Whether the Order referring this case to adjudication is bad because no such order was made following C. B. Case No. 23-B of 1958 and the same should not therefore have been passed in C. B. Case No. 59-B of 1959? It appears from the award that there was a fifth issue with regard to the nature of the relief, if any, to which the workmen were entitled. The parties led evidence before the Tribunal and there is no complaint that the employer did not receive a fair hearing.

4. On 17th November 1960 the Tribunal announced its award which was in favour of the workmen. It held that there was a dispute between the employers and their workmen which had resulted in a valid reference to the Labour Court under Section 4-K of the U. P. Industrial Disputes Act. On the merits of the dispute it held that none of the ten workmen who had raised the dispute was considered for the purpose of promotion as driver-cum-assistant fitter and their claims were ignored and others promoted because these others happened to be the members of a Labour Union for which the employer had a soft corner. To quote the conclusion of the Tribunal on this issue,

'The promotions were not given on merits, but were given to pamper one association at the cost of the rival association.'

5. On the question of seniority the Tribunal held on the evidence that all the workmen who had not been selected for promotions were senior to those who have been. It observed that the ten workmen who had raised the dispute were better qualified for promotion but 'The promotions appear to have been given without considering the merits.' The Tribunal found that the disputing workmen bad been deprived of promotion 'simply because they happened to be the members of the Pilibhit Sugar Mill Labour Union'. On these findings the Tribunal declared that the employers had wrongfully and unjustifiably deprived the disputing workmen of promotion to the post of a driver-cum-assistant fitter and that they were entitled to same emoluments and increments in their salary and to the same terms of employment which had been given to the other eleven who had been promoted.

6. Aggrieved by this award the petitioner company has moved this Court under Article 226. Mr. Shanti Bhushan, learned counsel for the petitioner, who argued this case with his usual tenacity, urged the following reasons in support of this petition. First, he contended that the reference by the Government was incompetent and the Tribunal had no jurisdiction to hear the dispute. Counsel pointed out that on almost identical facts the government had decided not to make a reference on an earlier occasion, and it was not open to Government to change its mind. I do not agree. In the first place, the facts on the second occasion were somewhat different. Earlier, the disputed promotions were of an officiating nature. According to the- company's own admission they were made for the duration of the off season of 1957. When the season passed off, the Government may have thought that it was not politic to rake up a dispute which had become somewhat infructuous; but a very different situation arose-when the temporary arrangements were confirmed and the disputing workmen were faced with supersession for the rest of their service. Their grievance would not be confined to one season and government was entitled to take a serious view of the second dispute.

7. However, I am inclined to the view that government has the power to change its mind even in the same case. One can visualise a situation where government first decides not to refer a dispute for adjudication by the Industrial Tribunal but subsequently on receiving more reliable reports on the gravity of the situation in the locality, it decides to make a reference. The executive must have the power in the public interest to review its decision in such situations and Section 21 of the U. P. General Clauses Act enables any authority to amend, vary, or rescind its previous orders. The analogy of the principle of res judicata does not apply in these matters and learned counsel made it clear that he was not invoking that principle. In my opinion, government can always review its previous decision and make a reference provided it acts bona fide and within a reasonable time and there is no statutory bar against such review.

8. Next, learned counsel contended that the Labour Court had no jurisdiction to sit in judgment on the decision of the employer in a matter concerning the promotion, of employees which is exclusively within the competence of the management. He argued that the decisions of this Court) and of the Supreme Court holding that a labour Tribunal has the power to reverse an employer's decision in cases of victimisation and unfair labour practice must be limited to cases of dismissal, and in any case, do not extend to the sphere of promotion. In the case of an illegal dismissal, the employee has a right to the post held by him either under the contract or the standing orders or some statutory rule or notice; but there is no vested right of promotion which must always be given onmerits and considerations of policy. Learned counsel conceded that his argument means that the plea of unfair labour practice or victimisation can never be raised by an employee in a case of promotion. I am unable to accept an argument which is based on a misunderstanding of the meaning of unfair labour practice.

9. In a recent case the Supreme Court held that an industrial Tribunal is not fettered by the law of contract or the terms of agreement between the employer and the employee and that it 'may create new obligations or modify contracts in the interests of industrial peace, to protect legitimate trade union activities and to prevent unfair practice or victimisation.' Rohtas Industries Limited v. Brij Nandan Pandey, (S) AIR 1957 SC 1 at p. 6. The Court approved of the following view contained in Ludwig Teller's Labour Disputes and Collective Bargaining, Vol. I p. 536:

'Industrial arbitration may involve the extension of an existing agreement, or the making of a new one, or in general the creation of new obligations or modification of old ones, while commercial arbitration generally concerns itself with interpretation of existing obligations and disputes relating to existing agreements.''

10. Thus one of the functions of an Industrial Tribunal, according to the Supreme Court, is to protect legitimate trade union activities. The welfare state of today has moved a long way from the early days of the trade union movement when the State, in this country and elsewhere, was suspicious of the trade unions and the employers tried to weaken them. The workmen on the other hand regarded them as essential to their welfare as, without them, they were not in a position to bargain collectively with the employers. They resisted any attempt by the employer to weaken the trade union movement and fought to win the right of collective bargaining through the trade union. Today the policy of our State (which is a welfare State) is on the one hand to prevent industrial strife between employers and workers, and on the other to secure economic justice for the workmen. The U. P. Industrial Disputes Act was enacted to prevent strikes and lock-outs and for the settlement of industrial disputes. The right to strike has been curtailed under the Act. At the same time, the Preamble to the Constitution holds out a promise to secure to all citizens economic justice and Article 43 directs the State

'to endeavour to secure by suitable legislation or economic organisation, or in any other way, a living wage and conditions of work ensuring a decent standard of life.'

11. It is a necessary corollary of this twin policy of industrial peace and economic justice that the State shall discourage any attempt by the employer to undermine the strength of the trade unions which enable the workmen to negotiate with employers from, a position of equal strength. Without the trade unions there can be not collective bargaining or settlement of industrial disputes by conciliation or arbitration. In a national crisis, as in Great Britain during the last world war, a strong trade union commanding the loyalty of all the workmen can be a pillar of strength for the nation. Thus it is against the public interest and the policyof the Industrial Disputes Act to permit the employers to undermine the trade unions which are the most effective instrument of the State policy of industrial peace through representative negotiations between employees and workmen. Any systematic attempt by the employer to use his powers of management to disrupt the trade union of his employees will be condemned by the Court as unfair labour practice.

12. Counsel's argument that there can be no unfair labour practice in the sphere of promotions as no worker has a right to be promoted is based on a complete misapprehension of the nature and purpose of unfair labour practice. An employer who is short-sighted enough to view the trade union of his workmen as an opponent may try to weaken it by purchasing the loyalty of some of the workmen by undeserved promotions or setting up a rival union and thus creating disunity in the labour ranks. The classical four-pronged weapon for confounding one's opponents (real or fancied) is sama, dama, danda, bheda 'win over, purchase, punish, divide'. Wrongful dismissal is not the only form of unfair labour practice which can take a variety of shapes, and it is not possible to define it or confine it within narrow limits. What is unfair labour practice or victimisation is a question of fact to be decided by a labour Tribunal upon the circumstances of each case. Unjust dismissal, unmerited promotion, partiality towards one set of workers regardless of merits, are illustrations of unfair labour practice. If an employer deliberately uses his power of promoting employees in a manner calculated to sow discord among his workmen or to undermine the strength of their union, he is guilty of unfair labour practice. I, therefore, hold that a labour tribunal can enquire whether a number of promotions made by the employer amounted to unfair labour practice or victimisation,

13. Learned counsel argued that there was no material on which the Labour Court could have found that the employer had been guilty of any unfair labour practice. The employers' decision to promote a few workers in preference to the ten respondents may have been erroneous, but it was bona fide, and the Labour Court could not interfere with its discretion. The record completely negatives this contention. The disputing workmen produced before the Labour Court evidence, which was believed by it, on the following facts. All the ten workmen are senior to those who have been preferred for promotion. They are also better qualified, having worked previously as assistant fitters whereas there was no evidence except the oral word of the Assistant Engineer Sharma (which was doubted by the Court) that any of the promoted workmen had worked as assistant fitters before their promotion. The employer had not proved a single fact against the disputing workmen which would stand in the way of their getting promotion. If the employer had made the promotions on merits these persons should have been selected as they were senior and better qualified. But the employer ignored merit and made the promotions to please one trade union and strengthen it against the rival union to which the disputing workmen belonged.

Previously there was one trade union of the workmen of this Sugar Mill, but as a result ofdifferences it split into two--the L. H. Sugar Factories Mazdoor Union and the Pilibhit Sugar Mill Labour Union. The first named union is affiliated to the Indian National Trade UnionCongress while the other to the U. P. Trade Union Congress. All the eleven workmen who were promoted are members of the first named union which is favoured by the employer, while all the ten who were not promoted are members of the other union. The union to which the promoted members belong is led by a man called Chotey Lal Tripathi, and the other by B. S. Chauhan. This Tripathi was consulted before the promotionsby the management and gave his written approval of the decision. The order promoting the eleven workmen was counter-signed by him, and therefore had his blessings. It Was on Tripathi's suggestion that the eleven workmen belonging to his union were promoted, after he had approached the Chief Engineer and requested him to strengthen his (Tripathi's) position against the rival union. The other union was not consulted at all.

The workmen who were not promoted submitted an application protecting against the promotions. In this very application they complained that the promotions were not being made on merits but simply to support the union led by Tripathi. They offered to compete with the workmen who were being recommended for promotion, Their representation was ignored. The Assistant Engineer Sharma deposed that prior to their promotion the promoted workmen were doing the same work as the workmen who have raised thisdispute. He tried to make out a case that his recommendations were made after looking into theprogress registers, records of efficiency, and percentages of all the workmen including those who have raised this dispute. But the Labour Court was inclined to doubt his story, as the records were not produced and Sharma admitted that his recommendations were not in writing. The Court accepted the testimony of the workmen that they are senior to the eleven promoted workers and better qualified, but were victimised because they happened to be members of the Pilibhit Sugar Mill Labour Union which is not favoured by the management, These are the facts held to have been established before the Labour Court.

14. The question before this Court is whether it was open to the Labour Court, after accepting the evidence of the workmen on the facts mentioned above, to pronounce the findings and the award winch it did. Court's finding on the first issue is that the promotions were not given on merit but to pamper one association atthe cost of the other, and that the claims of the ten disputing workmen were ignored and Promotions given to the other ten because they happened to be the members of the Union for which the employers had a soft corner. This is supported by ample evidence and counsel for the petitioner Company made no attempt to challenge it. On the second issue the Labour Court found that the ten disputing workmen are senior to the workmen who have been promoted and better qualified for promotion. This too was not challenged before me. On the third issue the Court held that though better qualified the disputing workmen were deprived of promotion simply because they happened to be the members of the Pilibhit Sugar Mill Labour Union. The word 'simply' implies that there was no other reason. The legality of this finding too was not challenged before me.

15. In my opinion the findings of the Labour Court are quite correct, and it is impossible to resist the conclusion that this is a blatant case of victimisation and an unfair Labour practice adopted with a cynical indifference to its effects on the peace within the industry. On behalf of the employers it was contended again and again that they have the unfettered right to promote whomsoever they like, and that the plea of victimisation or unfair labour practice is never available to workmen in a matter of promotion. I have already rejected this argument.

16. The next question is whether on these findings the Labour Court could have given the award which it did. Counsel for the company contended that it could not, and submitted that the proper award would have been to set aside the promotions and remand the case to the management with a direction to make fresh promotions on merits in accordance with the findings of the Court; but the Labour Court proceeded to award the promotions itself and thereby usurped a power which vested exclusively with the employer.

17. I am unable to agree. In the first place, a careful scrutiny of the operative part of the award does not reveal that the Labour Court has promoted the disputing workmen to any particular post. After holding that the employers have wrongfully and unjustifiably deprived the workmen to the post of driver-cum-assistant fitter, it has declared them to be

'entitled to the same emoluments and increment in their salary and to the same terms of employment which have been given to the 11 workmen who had been given promotion with effect from 1st August, 1957'.

Thus the award does not appear to direct the employer to give any particular post to a particular employee, but has held the disputing workmen to be entitled to the same emoluments and privileges as the other workmen. The Court has awarded compensation to the workmen who have been victimised for the loss suffered by them as a result of their wrongful and unfair treatment at the hands of the employer. There is nothing illegal or improper in this.

18. The suggestion that the Labour Court should have remanded the case for a fresh decision after setting aside the previous promotions is unsound. The eleven promoted workmen were not parties to this dispute and had no opportunity of being heard. If the Court had cancelled their promotions its award would not have been legal. In the circumstances, the only proper award was to compensate the ten disputing workmen who had been victimised without interfering with the rights of persons who were strangers to the dispute.

19. It was contended that as a result of this award the employer shall have to bear the burden of two sets of promotions one of which is unnecessary. That may be so. But the unnecessary (and unfair) promotions were the ones made bythe employer himself in violation of every principle of equity and fairness. The Labour Court was not concerned with the consequences to the employer of his own wrongful act, any more than a civil court is concerned with the 'Hardship' to a wrong-doer when he is directed to pay compensation to the victim of his tortious act, or a criminal court with the 'suffering' of a criminal who is punished for his crime. The duty of the Labour Court was to compensate the workmen who had been victimised by the employer and suffered financial loss. Its award does no more.

20. The conduct of the employer raises a question of principle of general importance. The State which holds the balance between the employer and workmen must preserve peace within the industry. On the one hand it must discourage strikes by the workmen, and on the other, put down any acts of victimisation or unfair labour practice by the employer which arc a fruitful cause of industrial strife. If any employer wilfully indulges in them he must be made to pay compensation, in justice and as a deterrent to others.

21. From the argument addressed to this Court it appears that the management of this Company belongs to a class of employers who think, somewhat like Rip Van Winkle, that they are still living in a world dominated by the economic philosophy of Adam Smith and that an employer can do anything he likes in the industry under his control regardless of any code of fairness and equity. Employers of this type have to realise that today the captains of industry must conduct themselves according to the philosophy of the welfare State which 'knows not Adam Smith'. I think the award of the Labour Court is unimpeachable.

22. Furthermore, even if the award does mean that the disputing workmen have been held entitled to promotion as driver-cum-assistant fitters with effect from a certain date, it is not beyond the competence of the Labour Court. It has found that these workmen are senior to those who have been promoted, that they were 'better qualified for promotion, that they were deprived of the right to be promoted simply because they were members of a trade union which is disliked by the employer and that the other workmen were promoted because they belonged to a rival trade union which is in the good books of the employer. On these findings, it was within the competence of the Labour Court to go further and hold that the disputing workmen have been wrongfully deprived of promotion and were entitled to it. This does not necessarily mean that the employer is bound to employ any workmen in any particular capacity but it does mean that he is bound to grant him the emoluments, increment in salary and other privileges which he would have earned if the promotions bad been made honestly.

23. Learned counsel cited a decision of M. C. Desai. J. (as he then was) in Radha Raman Bajpai v. Labour Appellate Tribunal of India, (1957) 2 Lab LJ 15 (All) in which it was held that the relations between the employer and the employee must be governed by the terms of the contract between the two and that the Contract Act remains fully operative except in so far as it isdisplaced by the Industrial Disputes Act. This decision was pronounced on 22-2-1958--that is, several months before that of the Supreme Court quoted above in which it was held that an Industrial Tribunal is not fettered by the law of contract and may create new obligations or modify contracts in the interests of industrial peace. Therefore, if the principles enunciated in this decision are in conflict with those of the Supreme Court, they must yield before the law laid down by the Supreme Court.

However, I see no conflict in the two decisions. The case before the learned Judge of this Court related to a dismissal of workmen on the ground that they had staged an illegal strike. The Tribunal held that this strike was illegal and the conduct of the workmen was unruly. But apparently on compassionate grounds it held that the punishment exceeded the gravity of the offence. There was no question of victimisation or unfair labour practice. In these circumstances it is possible to take the view that the question of severity of punishment must be left to the employer, provided his decision does not amount to victimisation or unfair labour practice. If, for example, for the same offence the employer punishes some workmen lightly and the others severely and the difference cannot be explained except on the ground that they belonged to two different trade unions, the Tribunal would have the jurisdiction to inquire into the dispute.

24. Finally, Mr. Shanti Bhushan contended that the Tribunal had erred in placing the onus of proof upon the employer or, at any rate, drawing an adverse inference against it for withholding material documents from the court. The judgment of the tribunal does not support this contention. The workmen had made out a Case of unfair labour practice and victimisation which, if unrebutted, entitled them to a decision in their favour. Their case was that though better qualified to be promoted they were virtually superseded in favour of others less qualified but in the good books of the employer for political reasons. The Tribunal has observed that though the employer claimed that the promotions had been made on the basis of the) progress report of each, candidate, it had not produced the documentary evidence which was in its possession--the character roll of the workers and other documents. In these circumstances, the Tribunal was justified in holding that the case of the workers had not been rebutted by the employer or even making an adverse inference against it.

25. I see no merit in this petition which is rejected in limine.

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