WRIT PETITION NO. 5303 OF 2016

15th January 2020

Petitioner Counsel: Mr. M. I. Dhatrak
Respondent Counsel: Mr. Ved Deshpande
Act Name: Maharashtra Recognition of Trade Unions and Prevention of Unfair Labour Practices Act, 1971 Sick Industrial Companies (Special Provision) Act, 1985 Industrial Disputes Act, 1947

Section :
Section 28 Maharashtra Recognition of Trade Unions and Prevention of Unfair Labour Practices Act, 1971 Section 44 Maharashtra Recognition of Trade Unions and Prevention of Unfair Labour Practices Act, 1971 Section 15(1) Sick Industrial Companies (Special Provision) Act, 1985 Section 15 Sick Industrial Companies (Special Provision) Act, 1985 Section 25F Industrial Disputes Act, 1947

Cases Cited :
Paras 9, 12: Ramesh Daji Jadhav Vs. National Textile Corporation and another, reported in 2003(5) Mh.L.J. 389
Paras 9, 12: National Textile Corporation (South Maharashtra), Ltd. Vs. B.N.Jalgaonkar and others, reported in 1998 (4) L.L.N. 537
Paras 9, 12: Rashtriya Kamgar Sanghatana and another Vs. G.K.W., Ltd. and others, reported in 2004(4) L.L.N. 486
Paras 9, 14: Talwara Cooperative Credit and Service Society Limited Vs. Sushil Kumar, reported in (2008) 9 SCC 486
Para 14: Hondaram Ramchandra Vs. Yeshwant Mahadev Kadam, reported in (2007) 14 SCC 277

JUDGEMENT

Heard.

2. Rule. Rule made returnable forthwith. The writ petition is heard finally with the consent of the learned counsel for the parties.

3. By this writ petition, the petitioner-employer has challenged concurrent orders passed by the Labour Court and the Industrial Court under the provisions of the Maharashtra Recognition of Trade Unions and Prevention of Unfair Labour Practices Act, 1971 (hereinafter referred to as “Act of 1971”), whereby termination of service of the respondent has been set aside and relief of reinstatement with full back wages has been granted.

4. The respondent joined the service of the petitionercompany in the year 1988 and continuously worked for about 20 years. On 12/07/2008, when he was working as shift in-charge, his service was terminated by a written order, by giving notice of one month.

5. The said action of the petitioner was challenged by the respondent by filing complaint before the Labour Court under section 28 of the Act of 1971, claiming that the petitioner had indulged in unfair labour practice by terminating service of the respondent.

6. The rival parties led oral and documentary evidence in support of their respective contentions. The Labour Court, in its judgment and order dated 03/01/2013, rendered a finding that the respondent had been able to prove that the order of termination of service dated 12/07/2008 was illegal and that the petitioner had indulged in unfair labour practice. On this basis, the petitioner was directed to reinstate the respondent with continuity in service and full back wages. Aggrieved by the same, the petitioner filed revision petition under section 44 of the Act of 1971 before the Industrial Court, Akola. By the judgment and order dated 21/11/2015, the Industrial Court dismissed the revision petition and confirmed the order passed by the Labour Court in favour of the respondent.

7. While pressing the present writ petition challenging the aforesaid judgments and orders passed by the Labour Court and the Industrial Court, the learned counsel appearing for the petitioner informed this Court that on 20/02/2017 a reference concerning the petitioner had been registered under section 15(1) of the Sick Industrial Companies (Special Provision) Act, 1985 (hereinafter referred to “Act of 1985”) and that this aspect could not be brought to the notice of the Industrial Court, as the said reference was registered on 21/10/2015, which was just one month prior to the impugned judgment and order dated 21/11/2015, passed by the Industrial Court. This Court recorded the aforesaid statement and issued notice to the respondent.

8. In support of the present writ petition, the learned counsel appearing for the petitioner submitted that the Courts below committed an error in holding in favour of the respondent, firstly, because the respondent could not be said to be a workman, as he was performing superintending duties and that this aspect was not properly appreciated by the Courts below. Secondly, it was submitted that the reference under the provisions of the Act of 1985 was already registered, which was an aspect not appreciated by the Industrial Court and that in view of the said development, the proceedings before the Industrial Court could not be continued. Thirdly, it was submitted that now liquidator had been appointed by order dated 24/09/2019 in respect of the petitioner and the unit of the petitioner where the respondent has worked was closed down in the year 2015 and that therefore, there was no question of grant of relief of reinstatement to the respondent. Fourthly, it was further submitted that since the law as per section 25F of the Industrial Disputes Act, 1947 (hereinafter referred to as “Act of 1947”) had been satisfied by the petitioner by giving written notice of one month to the respondent, while terminating his service, he could not have raised any grievance in that regard.

9. On the other hand, the learned counsel appearing for the respondent submitted that the question as to whether the respondent could be said to be a workman was raised as a preliminary issue by the petitioner and the same had been held against the petitioner. Apart from this, on the basis of the material on record, it was evident that the respondent was indeed a workman considering the nature of duties performed by him. On the question of compliance with the provisions of the Act of 1947, it was pointed out that the petitioner itself had admitted that there were more than 100 employees, employed in the petitionercompany and that therefore, section 25F of the Act of 1947 would not be applicable. On this basis, it was submitted that there was non-compliance of the requirement of law while terminating the service of the respondent. On the question of the proceedings in the present case being suspended in view of the registration of reference under section 15 of the Act of 1985, the learned counsel for the respondent invited attention of this Court to judgments of this Court in the case of Ramesh Daji Jadhav v. National Textile Corporation and another, reported in 2003(5) Mh.L.J. 389, National Textile Corporation (South Maharashtra), Ltd. v. B.N.Jalgaonkar and others, reported in 1998 (4) L.L.N. 537 and Rashtriya Kamgar Sanghatana and another v. G.K.W., Ltd. and others, reported in 2004(4) L.L.N. 486 to contend that merely because proceedings under the Act of 1985 were pending, the proceedings before the Courts below and the effect of their orders could not be suspended. On the question of the unit being closed and liquidator having been appointed, it was submitted that the petitioner could not escape liability only because of the said facts. Alternatively, it was submitted that if reinstatement could not be granted due to closing down of the unit, compensation could certainly be granted as per law laid down by the Hon’ble Supreme Court in the case of Talwara Cooperative Credit and Service Society Limited v. Sushil Kumar, reported in (2008) 9 SCC 486.

10. Heard learned counsel for the rival parties and perused the material on record. On the question whether the respondent could be said to be the workman, this Court perused the material on record as also the findings rendered by the two Courts below. This Court is in agreement with the findings rendered by the two Courts below. Not only was such a preliminary issue raised by the petitioner already rejected, but the material on record sufficiently demonstrated that the nature of duties performed by the respondent, proved the fact that he was indeed a workman and that he could maintain the complaint filed by him.

11. Insofar as the question of compliance to the provisions of the Act of 1947 is concerned, the material on record shows that the petitioner itself came forward with a stand that it had more than 100 employees, employed in the concerned unit. Therefore, the present case concerned an employer, who had more than 100 employees and thus, compliance of section 25F of the Act of 1947 would not show sufficient compliance of law while terminating the service of the respondent. Therefore, the findings rendered on merits by the two Courts below do not deserve any interference.

12. Insofar as suspension of proceedings before the Courts below in view of the registration of reference under the Act of 1985, the learned counsel appearing for the respondent is justified in relying upon the judgments of this Court in the cases of Ramesh Daji Jadhav v. National Textile Corporation and another (supra), National Textile Corporation (South Maharashtra), Ltd. v. B.N.Jalgaonkar and others, (supra) and Rashtriya Kamgar Sanghatana and another v. G.K.W., Ltd.and others (supra), wherein it has been held in categorical terms that mere pendency of proceedings under the aforesaid Act of 1985, would neither lead to suspension of the proceedings under the Act of 1971 and other such Legislations, nor could the effect of orders passed in favour of employees under the provisions of the Act of 1971, be suspended merely due to pendency of such proceedings.

13. But, the material on record indicates that sometime in the year 2015 itself the unit of the petitioner was closed down. It is also a matter on record that on 24/09/2019, liquidator has been appointed. In such a situation, even though this Court is of the opinion that the impugned judgments and orders passed by the two Courts below do not deserve to be interfered with, the relief of reinstatement with full back wages would remain hollow in view of the subsequent development of closing down of unit of the petitioner.

14. In such a situation, this Court can certainly balance the equities by modifying the relief granted to the respondent by directing payment of suitable amount towards compensation. In this regard, the learned counsel for the respondent invited attention of this Court to the judgment of the Hon’ble Supreme Court in the case of Talwara Cooperative Credit and Service Society Limited v. Sushil Kumar (supra), wherein the Hon’ble Supreme Court found it fit to direct payment of amount of Rs.2,00,000/- in spite of confirming the order of reinstatement with full back wages, in the backdrop of the fact that unit in which the employee was working had become sick. In this context, the learned counsel appearing for the petitioner referred to judgment of the Hon’ble Supreme Court in the case of Hondaram Ramchandra v. Yeshwant Mahadev Kadam, reported in (2007) 14 SCC 277 to contend that limited relief in terms of compensation under section 25FFF of the Act of 1947 could have been granted. In that case the matter was remitted back for fresh evidence.

15. Having considered the position of law in the peculiar circumstances, where the unit in question has been closed down with passage of time, this Court is of the opinion that instead of merely confirming the order of reinstatement with full back wages granted in favour of the employee, this Court can certainly consider the quantum of back wages payable to the employee and then arrive at a reasonable figure of compensation payable to such an employee. In the present case, since this Court is confirming the findings of facts recorded by the two Courts below, it is only a question of the nature of relief that can now be granted to the respondent in view of the subsequent development pertaining to closing down of the unit of the petitioner in the year 2015 and appointment of liquidator by order dated 24/09/2019.

16. The learned counsel for the respondent on instructions submits that back wages as on today worked out to Rs.9,86,568/-, if the basic pay that the respondent was receiving in July, 2008, when service was terminated, was taken into account. The learned counsel for the respondent while arriving at the said amount, has not taken into consideration the periodic increase in wages and according to him, payment of the said amount would meet the ends of justice. Although the learned counsel for the petitioner has opposed grant of entire quantum of the said amount, this Court is of the opinion that substantial relief in terms of the compensation deserves to be granted to the respondent in the peculiar facts and circumstances of the present case.

17. It is undisputed that the respondent worked for the petitioner for a continuous period of 20 years. It is not even the case of the petitioner that the respondent was temporarily employed. The two Courts below have concurrently found that the order of termination of service dated 12/07/2008 issued against the respondent was illegal and that the petitioner had indulged in an unfair labour practice. This Court has found the concurrent findings of the two Courts below as sustainable and no error can be attributed to the same. It is only because the unit of the petitioner has closed down in the year 2015 and liquidator has been appointed by order dated 24/09/2019, that this Court is moulding the relief from a direction of reinstatement with back wages granted by the two Courts below to grant of reasonable and just compensation to the respondent.

18. In the facts and circumstances of the present case, this Court is of the opinion that the ends of justice would be met if the petitioner is directed to pay compensation of Rs.7,00,000/- to the respondent, instead of implementing the order of reinstatement with full back wages. The said amount has been arrived at by this Court, taking into consideration the quantum of back wages to which the respondent would otherwise be entitled.

19. In view of the above, the writ petition is partly allowed. While upholding the concurrent findings given by the two Courts below, the relief is moulded to the extent that instead of the direction of reinstatement with full back wages granted in favour of the respondent, the petitioner is directed to pay amount of Rs.7,00,000/- towards compensation to the respondent. The respondent shall be at liberty to take such steps as available in law to recover the said amount of compensation granted by this Court. The impugned orders are modified to the above extent.

20. Rule is made absolute in the above terms. No order as to costs.