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Concerned Workmen of Sahai Industries Vs. B.D. Gupta and anr. - Court Judgment

LegalCrystal Citation
SubjectLabour and Industrial
CourtDelhi High Court
Decided On
Case NumberCivil Writ Appeal No. 940 of 1943 and 620 of 1974
Judge
Reported in(1984)ILLJ165Del
ActsIndustrial Disputes Act, 1947 - Sections 10(1)
AppellantConcerned Workmen of Sahai Industries
RespondentB.D. Gupta and anr.
Advocates: O.P. Saxena and; S.N. Bhandari, Advs
Cases ReferredNew Delhi v. Ram Kumar and
Excerpt:
.....of july, 1969, the management could reopen and restarted the business. (3)who would fail in the matter of award of back wages in case retrenchment is held to be bad in the absence of evidence being led by either party. the submission is that the discharge of the workmen from the service is bad and the normal rule on reinstatement is full back wages and the burden to dispute payment of full back wages is on the management. in the aforesaid case of krishan murari lal kapur (supra) held, it is well settled and it is unnecessary to cite authorities in support of the proposition, that in cases of wrongful dismissal reinstatement is the normal relief which should be granted to the aggrieved worker. it is equally well settled that though the matter of relief is essentially a discretionary..........officer, additional labour court, on a reference made to it, that the refusal of duties to the workmen concerned with effect from 21st may, 1969 could not be justified by the management on any ground whatsoever and directing that the workmen concerned be taken back on duty by the management with only 25% wages as compensation for the period commencing from 21-5-1969 till the date of the publication of the award. (2) the management has challenged the award in so far award directs the workmen to be taken back on duty with only 25% wages as compensation whereas the workmen concerned have challenged the award claiming that the award should not have been restricted to the 25% wages as compensation. (3) the facts necessary for the present controversy are that two references were made by.....
Judgment:

Yogeshwar Dayal, J.

(1) Civil Writ No. 940/73 and Civil Writ No. 620/74 arc two cross writ petitions filed on behalf of the Management and the Workmen challenging an award dated 10th May, 1973 passed by Shri B.D. Gupta, Presiding Officer, Additional Labour Court, on a reference made to it, that the refusal of duties to the workmen concerned with effect from 21st May, 1969 could not be justified by the Management on any ground whatsoever and directing that the workmen concerned be taken back on duty by the Management with only 25% wages as compensation for the period commencing from 21-5-1969 till the date of the publication of the award.

(2) The management has challenged the award in so far award directs the workmen to be taken back on duty with only 25% wages as compensation whereas the workmen concerned have challenged the award claiming that the award should not have been restricted to the 25% wages as compensation.

(3) The facts necessary for the present controversy are that two references were made by the Lieutenant Governor, Delhi in exercise of his powers under Sections 10(1)(c) and 12(5) of the Industrial Disputes Act, 1947, (hereinafter referred to as the 'Act of 1947') to the Additional Labour Court, one dated 15th September, 1969 relating to 20 workmen and the other dated 28th April, 1970 relating to one Sh. Ram Raj. The terms of references were in similar terms. For understanding the contentions, terms of one of the references were as under :-

'WHETHER the following workmen are entitled to be taken back on duty with full compensation for the period commencing from 21-5-1969 onwards and if so what directions are necessary in this regard......'.

(4) The case of the workmen in brief was that they had been working with the Management since 1968 and that they were agitating for letters of appointments etc. but the Management refused to issue the same. That they formed a Union and became its members in the month of April, 1969. That the Management came to know of it in May, 1969 and became highly prejudiced against them and consequently refused duty to them all of a sudden without assigning any reason with effect from 21st May, 1969. That the workmen made repeated representations to lift the lockout and to allow them to resume their duties but all in vein. By letter dated 4th August, 1969, the Management demanded particulars from the workmen regarding addresses etc. which were duly supplied but even then the Management did not permit them to resume their duties. The Management made fresh recruitments but the workmen concerned continued to be kept out of service. The labour department also made efforts but the Management disregarded their suggestions also. It was pleaded that it was a case of unfair labour practice and a piece of victimization and workmen concerned are entitled to be taken back on duty with continuity of service and with full wages for the intervening period with effect from 21-5-1969.

(5) In the written statement filed on behalf of the Management, it was inter alias pleaded that the respondent factory was started on 1-7-1968 and the workmen concerned were employed on the clear understanding that the factory was on a trial period of about a year. They were assured that if the Management was able to establish it on a permanent basis, they will be considered for permanent appointments. The workmen concerned accepted employment on a temporary basis during the trial period. In August and September, 1968, some of the workmen approached the management and asked for letters of appointments etc. The management regretted as the factory was still on a trial basis. In the first week of May, 1969, the management felt that the factory could not continue in view of the economic conditions and so decided to close down the business. On 21-5-69, the employees were duly informed that their services being temporary stood terminated due to the closure of the business of the factory and hence they were advised to collect their dues on any day. In the first week of June, 1969, the workmen moved the Conciliation machinery through their union. The Management appeared before the Conciliation Officer. In the first weak of July, 1969, the Management could reopen and restarted the business. On 8th July, 1969, a letter was sent to the employees advising them to contact the Manager if they were desirous of working in the factory with a written application. No such application was received till July, 1969. On 24th July, 1969, some of the workmen turned up and submitted written applications. However, they were wanting in essential particulars and so another letter dated 26-7-1969 was sent to the workmen concerned asking for all particulars. The same were not supplied. In the absence of the same, the Management could not take any action for employment of the workers concerned. It was pleaded that the workmen are not entitled to be taken on duty with or without any continuity of service and back wages.

(6) In the replication, the workmen denied the case of the Management and pleaded that they were playing a game of hide and seek by sending letters to the workmen concerned but were not employed when they approached for the purpose.

(7) Both the parties led evidence. The Labour Court while giving its award found that though in the written statement case of the Management was closure of the factory but the counsel appearing for the Management conceded before it that it was not a case of termination of the services due to closure of the factory but it was a case of retrenchment. In regard to the plea of retrenchment taken before the Labour Court during arguments, the Labor Court held that there was no such case set up in the written statement and in any case no valid reason of retrenchment of workmen has been given. The Management has not even tried to justify the alleged retrenchment on the basis of re-organisation of the factory or the alleged surplus of the labour in the factory. It accordingly, held that it was not the case of bona fide retrenchment and the subsequent conduct of the Management shows that it was only an attempt on his part to somehow get rid of these workmen and, thereforee, the refusal of the duties to the workmen with effect from 21st May, 1969 could not be justified by the Management on any ground. It held that, 'the facts and circumstances established on the record are that the workmen joined the union in April, 1969, they demanded appointment letters from the Management in May, 1969, they represented the case of a dismissed workman Ram Dayal to the Management and that they were refused duties w.e.f. 21-5-1969 for which the management could not supply any valid justification.' Thereafter the Labour Court considered the question of what compensation should be allowed to the workmen concerned for the period commencing 21-5-1969 onwards. In this behalf it observed, 'Only two of the workmen concerned have appeared in court in support of their case. Even they did not state that the workmen concerned have remained unemployed since 21-5-1969. Accordingly, there is nothing to show that any of the workmen concerned has been without any earning during the said period. Of course there is no justification for refusing them duties w.e.f. 21-5-1969 by the Management as discussed above. Considering the facts and circumstances of present case in my opinion the workmen concerned should be allowed only 25% wages for the said period as compensation.'

(8) Before me, Mr. S.N. Bhandari, learned counsel for the Management, challenged the award on the following four grounds :-

(1)The first submission was that the Labour Court had no jurisdiction in matters relating to retrenchment of workmen and closure of establishment as only Industrial Tribunal could adjudicate upon it as it is a matter specified in the Third Schedule to the Act. It was also submitted that the proviso to Sub-section (1) of Section 10 of the Act also did not confer any power on the appropriate Government to refer such a matter to Labour Court unless a Labour Court is specifically constituted for that purpose.

(2)Whether the Labour Court which reaches a finding that the workmen had not led any evidence and only two out of 22 workmen have appeared who also do not depose about their employment or un-employment during the period of closure and award was within jurisdiction to award back wages.

(3)Who would fail in the matter of award of back wages in case retrenchment is held to be bad in the absence of evidence being led by either party.

(4)The writ petition is not maintainable as the writ petition has not been filed by the workmen.

(9) The cross writ petition on behalf of the workmen challenged the award whereby it restricts the compensation while ordering reinstatement to be with 25% instead of full back wages. The submission is that the discharge of the workmen from the service is bad and the normal rule on reinstatement is full back wages and the burden to dispute payment of full back wages is on the Management.

(10) I would now deal with the submissions made on behalf of the Management.

(11) It will be noticed that the terms of reference do not talk of retrenchment or closure. They simply talk of re-instatement of the workmen to be taken back on duty and such a dispute is within the competence of the Labour Court and is covered by item No. 6 of Second Schedule to the Act. Item No. 6 relates to residuary matters which are not specified in the Third Schedule. Even if for the sake of argument, it is assumed that it is matter relating to retrenchment of workmen as was argued before the Labour Court, it will be noticed that the dispute relates to less than 100 workmen and under Section 10(1) read with first proviso, the appropriate Government, even if it relates to matter specified in third schedule, can, if it so thinks fit, make the reference to a Labour Court. Section 10(1) read with the proviso reads as under:-

'10.(1) (Where the appropriate Government is of opinion that any industrial dispute exists or is apprehenced, it may at any time), by order in writing :- (a) refer the dispute to a Board for promoting a settlement thereof; or (b) refer any matter appearing to be connected with or relevant to the dispute to a Court for inquiry ; or (e) refer the dispute or any matter appearing to be connected with, or relevant to, the dispule, if it relates to any matter specified in the Second Schedule, to a Labour Court for adjudication, or (d) refer the dispute or any matter appearing to be connected with, or relevant to, the dispute, whether it relates to any matter specified in the Second Schedule or the Third Schedule, to a Tribunal for adjudication. Provided that where the dispute relates to any matter specified in the Third Schedule and is not likely to affect more than one hundred workmen, the appropriate Government may, if it so thinks fit, make the reference to a Labour Court under clause (e).

(12) It is clear from the proviso that where the workmen concerned who are not likely to be affected are not more than 100 workmen, it is up to the appropriate Government to refer it to the Labour Court or to Industrial Tribunal. The appropriate Government could have, thus in the present case referred the dispute to the Labour Court. It has contended that the labour court had to be specially constituted in that behalf. Labour Court was already functioning in Delhi and such dispute, even if it related to retrenchment could be referred by the appropriate Government to such a Labour Court. In fact, in the present case, Lieutenant Governor referred the dispute to Additional Labour Court for adjudication and at that time it was presided over by Shri Gian Chand Jain for adjudication. I am supported in my view by a recent decision of Kotwal, J. in Jammu and Kashmir Project Construction Corporation Ltd. Jammu, petitioner v. Labour Court, Jammu and others, respondents, 1983, Labour & Industrial Cases 257.

(13) The second and third submissions on behalf of the Management and the submission on behalf of the workmen claiming full back wages are really crux of the whole matter. Mr. Bhandari submitted that the issue which was framed was in terms of the reference which have already been reproduced above and which place the burden for claiming compensation on the workmen and thereforee, the Labour Court could not award any compensation while ordering re-instatement unless the workmen had pleaded and proved by leading evidence that they were unemployed during the period in dispute and without that evidence no compensation at all could have been awarded. On the other hand, Mr. Saxena, learned counsel of behalf of the workmen submitted that it is the settled law that if the termination is found ab initio void, there is no question of granting reinstatement because there is no cessation of service. If there is an ineffective order of termination, then the workmen concerned continues to be in service with all consequential benefits. It was thus, submitted that burden of pleading that compensation should be paid or not paid and the circumstances in which it should not be paid is on the employer and in the absence of any such plea in the written statement, the Labour Court was duty bound to order full compensation. I may stale at the out set that there was no plea whatsoever in the pleadings of the employer of any financial constraint on the management to pay full back wages nor was there any plea of want of confidence. The Labour Court has, infact, found that there was no reason whatsoever for terminating the services of the workmen. Mr. Bhandari relied upon a decision of Chadha, J in M/s. Daily Tej Private Ltd., vs. Lt. Governor Delhi, through Delhi Administration and. others 1979 (39) FLR 302 following the decision of of Anand.J in Krishan Murari Lal Kapur v. Presiding Officer, Additional Labour Court and another 1976 (33) FLR 76. Anand J. in the aforesaid case of Krishan Murari Lal Kapur (supra) held,

'IT is well settled and it is unnecessary to cite authorities in support of the proposition, that in cases of wrongful dismissal reinstatement is the normal relief which should be granted to the aggrieved worker. It is equally well settled that though the matter of relief is essentially a discretionary matter, the discretion has to be exercised according to well known principles and that the normal rule of reinstatement could be departed from only in extraordinary cases in which such a relief cannot be granted either because the establishment is closed down or the post has been abolished or because of bitterness between the parties and lack of confidence such a relief would not be appropriate.

(14) Learned Judge further observed, 'Now, it is well settled that the claim of back wages would not succeed merely because the termination or dismissal is set aside. The aggrieved workman would still be bound to make out a case for award of back wages by producing sufficient material which may show that during the period of his forced unemployment by the management he had remained unemployed or partly employed or was otherwise not able to earn what his employment is subsisting with the management would have entitled him to.........'.

(15) This view was followed by Chadha, J. in the aforesaid case. Anand, J. thought that the burden to claim back wages was on the workman when his dismissal was found to be illegal and it was for workman to plead necessary case and lead necessary evidence. Learned Judge thought that it was well settled and he did not refer to any case on the subject while giving the aforesaid decision.

(16) On the other hand, there is a catena of authorities of various High Courts including the Supreme Court just to the contrary. And it is unfortunate that these authorities have not been brought to the notice of Anand, J. when he made the aforesaid observations in the case of Krishan Murari Lal Kapur (supra). Initially, the question whether it is for the workman to show that he was not employed elsewhere during the period between the termination of his service and the order of reinstatement or it is for the employer to establish that the workman was employed elsewhere had given rise to a considerable divergence of judicial opinion. A single Judge of the Allahabad High Court (Dhavan, J.) in Rakeshwar Dayal v. Labour Court 1962 1 L.L.J. 5, as an obiter said that, 'a servant who sues his employer for wrongful dismissal must show that he made efforts to minimise his loss'. Following these observations, a Division Bench of the Bombay High Court in Malik Dairy Farms v. Its Workers' Union (1968) 11 L.L.J. 523 quashed the order of the Labour Court granting full wages and sent the case back to the Labour Court for rehearing on this point and gave no reasons of its own in favor of the finding. A similar view was expressed by Andhra High Court in S.V. Mills v. Industrial Tribunal (1973) 2 A.P.L.J. 374.

(17) On the other hand, a single Judge of the Madras High Court in United Bleachers (P) Ltd. v. Labour Court (1964) 2 L.L.J. 156 (Veeraswami, J.) held that the allegation that the concerned workman was employed elsewhere and was earning during the period of unemployment has to be proved by the employer and it is not sufficient to take the plea in the written statement, but it has to be proved by leading evidence or cross-examining the workman before the tribunal enabling it to assess the quantum of the backwages. Falshaw, G.J. while sitting in the Division Bench in this case of Daljeet & Co (P) Ltd. v. State of Punjab (1966) 1 L.LJ. 875 affirmed the view of Kapoor.J. in (1963) 2 L.L.J. 17, Falshaw, G.J. for the Division Bench, observed that, 'it is for the employer to raise this matter in the course of the enquiry and prove that the employee has been earning wages for the whole or for the part of the pciiod in question. In fact, a subsequent decision, a division Bench of the Allahabad High Court in Postal Seals Industrial Cooperative Society Ltd. v. Labour Court (1971) L.L.J. 327 (All) (Dwivedi, J.J dissented from the decision in Rakeshwar Dayal's case (supra) and the cases in which it was followed and observed that if the normal rule is to award full back. wages on reinstatement, then the burden of establishing the countervailing circumstances to neuterlise the normal rule would be on the employer. It was, thciefore, for the employer to plead and prove to the satisfaction of the tribunal that the workman had made some earnings during the period of his enforced idleness or that he had refused to seek or accept alternative job. It was unequivocally stated that it was not for the workman to plead and prove that he had tried to minimise the loss during this enforced idleness and if the employer pleads and proves that the workman is not entitled to full wages and he had willfully failed to seek and accept alternative jobs, it will be for the workman then to offer due Explanationn as to why he did not seek and accept alternative jobs or that he did seek alternative job but he failed. A Division Bench of the Bombay High Court in Lalit Gopal Berry v. U.V. Hirway (1973) 2 L.L J. 22 (Bom), per K.K.Desai, J. also explained its earlier decision in Malik Dairy Farms case (supra) and held that the question whether the employee had been gainfully employed during the relevant period must ordinarily be raised not by the employee but by the employer in the proceedings before the industrial adjudicator.

(18) The matter no longer remains in the arena of conflicts of the decision in view of the pronouncement of the Supreme Court in Mis. Hindustan Tin Works Pvt. Ltd., v. The Employees of M/s. Hindustan Tin Works Pvt. Ltd. A.1.R. 1975 SC 75, DA. Desai, J. speaking for the Supreme Court observed, 'If the normal rule in a case like this is to award full back wages, the burden will be on the appellant employer to establish circumstances which would permit a departure from the normal rule.' The learned Judge of the Supreme Court made reference to the earlier decisions of various High Courts including the Division Bench judgments of Gujarat and Allahabad High Courts in Postal Seals Industrial Co-operative Society Ltd. v. Labour Court 1971 (1) LLJ 327 All and Dhari Gram Panchyat v. Shri Brahad Saurashtra Safai Kamdar Mandal, Rajkot 1971 (1) LLJ 508 Guj.. Desai, J. also observed in para 11 as under :-

'IN the very nature of things there cannot be a strait-jacked formula for awarding relief of back wages. All relevant considerations will enter the verdict. More or less, it would be a motion addressed to the discretion of the Tribunal. Full back wages would be the normal rule and the party objecting to it must establish the circumstances necessitating departure.'

The same view was followed by the Supreme Court in Gujarat Steel Tubes Ltd etc. etc. v. Gujarat Steel Tubes Mazdoor Sabha and others, : (1980)ILLJ137SC and again in Surendra Kumar Verma etc.. v. The Central Government Industrial Tribunal-cum-Labour Court : (1980)ILLJ137SC and Mohan Lal v. The Management of M/s. Bharat Electronics Ltd. : (1981)IILLJ70SC , it was observed, 'If the termination of service is ab initio void and inoperative, there is no question of granting reinstatement because there is no cessation of service and a mere declaration follows that he continues to be in service with all consequential benefits.' It was again held by Allahabad High Court in Workmen of Jain Glass Works and another v. State of Uttar Pradesh and others 1982 Lab. IC 967, wherein it was specifically observed that, 'the burden of pleading is on the employer.'

(19) The decision of the Supreme Court in Hindustan Tin Works (supra) again came up for consideration before a Division Bench of this Court (Sachar and M.L Jain, JJ.) in Management of Delhi Transport Corporation, New Delhi v. Ram Kumar and another 1982 Lab. IC 1378 and the Division Bench following the decisions of Hindustan Tin Works (supra) and Gujarat Steel Tubes Ltd. (supra) held, 'where the dismissal of the workman is found to be unjustified and his reinstatement is directed by the Labour Court, the workman is entitled to full back wages except to the extent he was gainfully employed during his enforced idleness. It is for the employer to establish and prove that the workman was gainfully employed during enforced idleness. No presumption of being gainfully employed can be raised.'

(20) I am bound by the aforesaid decisions of the Supreme Court as well as of Division Bench of this Court. I was informed that the decision of Chadha, J. following the decision of Anand, J. is already inappeal. But in view of the authorities pronouncement of the Division Bench considering the aforesaid Supreme Court decisions, I have no option while affirming the award partly as to reinstatement to set aside the award relating to compensation being limited to 25% only for the period 21-5-1969 till the date of publication of the award and also exercise my powers under articles 226 and 227 of the Constitution and modify the award and direct that not only the workman will be entitled to the reinstatement but will be entitled to with full back wages from 21-5 69 till the date of the publication of the award.

(21) Coming to the last submission on behalf of the Management, it will be noticed that it is clear from the actual cause title of the civil writ that the heading of the petition is, 'Concerned workmen of M/s. Sahni Industries, through the West Delhi Engineering Mazdoor Union'. Thus, the writ petition is properly framed. Mr. Bhandari submitted that the affidavit in support of the petition is of one Sadhu Singh, General Secretary, West Delhi Engineering Mazdoor Union, Karampura and it is submitted that it has not been supported by any affidavit of any workmen, lam afraid, this objection has no merit again. This union has been representing the cases in the Labour Courts and is Fully conversant with the case of the workmen. It was then urged that the stamp purchased for the writ petition was in the name of West Delhi Engineering Mazdoor Union and not in the name of the workmen. In this connection, I may mention that when this objection was raised, Mr. 0.P. Saxena, learned counsel for the workmen filed a requisite stamp purchased in the name of the workmen in this Court.

(22) The result is that the writ petition filed on behalf of the Management being Civil Writ No. 940/73 fails and the writ petition No. 620/74 filed on behalf of the workmen is accepted and the award of the Tribunal is modified accordingly.

(23) I may mention that during the hearing of the matter, it was pointed out that so far as workman Hamir Singh is concerned, matter was compromised during the proceedings before the Labour Court on 28th September, 1969 but the compromise was not tendered in evidence nor anybody else disputed about it. As and when the necessity arises of the execution of the award, the matter can be examined by the concerned authority at that stage in accordance with Law. Parties are however, left to bear their own costs.


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