Bhanubhai Ranchhodbhai Parmar and Others vs Mafatlal Industries Ltd.

M.R. Shah, J.—Rule. Mr. Krunan Nayak, learned advocate appearing on behalf of Mr. Trivedi and Gupta, waives the service of notice of rule on behalf of the Respondent.

With the consent of the learned advocates appearing on behalf of the respective parties, present petition is taken up for final hearing today.

By way of this petition under Article 226/227 of the Constitution of India, the Petitioners have prayed for an appropriate writ, order and/or direction, quashing and setting aside the order passed by the Industrial Tribunal at Nadiad in Review Application (ICM) No. 1 of 2004.

The facts leading to the present special civil application, in nutshell, are as under:

All the Petitioners were/are workmen of Respondent M/s. Mafatlal Industries Ltd. Their services came to be terminated in the year 1985 and therefore, the respective Petitioners workmen preferred T. applications before the Labour Court, Nadiad under the provisions of the Bombay Industrial Relations Act. That it appears that the Respondent-company approached the Board for Industrial and Financial Reconstruction under the provisions of the Sick Industrial Companies (Special Provisions) Act, 1985 ("the SICA Act" for short) in the year 2000. It is the case on behalf of the respective Petitioners that at the relevant time, the company did not submit anything with respect to the reference before the BIFR, however, subsequently, a rehabilitation scheme came to be sanctioned by the BIFR in the year 2002 and thereafter in December, 2003, the Respondent-company submitted an application before the labour court to cancel and/or suspend the proceedings in T. Application, etc., invoking provisions of Section 22 of the SICA Act. That the Labour Court, Nadiad vide order dated December 18, 2003, dismissed the said application and directed to proceed further with the T. Application No. 62 of 1985 and BIFR Application No. 38 of 1988. Being aggrieved by and dissatisfied with the aforesaid order dated December 18, 2003, passed by the Labour Court, Nadiad below application exhibit 5, the Respondent-company preferred a Revision Application (ICN) No. 1 of 2004 before the Industrial Tribunal, Nadiad u/s 85 of the Bombay Industrial Relations Act, 1946 ("the BIR Act" for short) and the learned Industrial Tribunal, Nadiad by the impugned order dated April 26, 2004, partly allowed the revision application by quashing and setting aside the order passed by the Labour Court, Nadiad dated December 18, 2003 in T. Application No. 62 of 1985 and other allied matters, by further passing an order that the said proceedings of T. Application No. 62 of 1985 and other allied matters shall remain suspended till the Petitioners obtain consent from the BIFR. Being aggrieved by and dissatisfied with the impugned order passed by the Industrial Tribunal, Nadiad dated April 26, 2004, in Revision Application (IC) No. 1 of 2004 in suspending the further proceedings of T. Application No. 62 of 1985 and other matters till the Petitioners obtain consent from the BIFR, the Petitioners have preferred the present special civil application under Article 226/227 of the Constitution of India.

Mr. R.D. Raval, learned advocate appearing on behalf of the Petitioners/ workmen has vehemently submitted that the Industrial Tribunal has materially erred in suspending the proceedings of T. Application No. 62 of 1985 and other allied matters till the Petitioners obtained consent from the BIFR. It is submitted that the Industrial Tribunal has not properly appreciated the scope and ambit of Section 22 of the SICA. It is further submitted that the bar u/s 22 of the SICA would come into play where any execution of the order having financial implication is sought. It is submitted that in the present case even the adjudication is yet to take place and only thereafter the question with respect to execution of the judgment and order will come. It is submitted that even otherwise, in the facts and circumstances of the case, the learned Industrial Tribunal has materially erred in staying the further proceedings of T. applications which are of the year 1985 and all the Petitioners/workmen are out of job since 1985. It is further submitted that at the relevant time when the T. applications were submitted, the Respondent-company was not before the BIFR and the Respondent-company approached the BIFR for the first in the year 2000 and the scheme alleged to have been sanctioned in the year 2003. It is further submitted that, therefore, the bar u/s 22 of the SICA would not be attracted. It is further submitted that in any case, the tribunal is not justified in staying the further proceedings and adjudication of the T. applications and other allied matters. It is further submitted that even keeping all the questions open as to whether in the facts and circumstances of the case, Section 22 of the SICA would be applicable or not, there is no justification in staying the further adjudication of the proceedings which were initiated in the year 1985, more particularly when at the relevant time there was no reference pending before the BIFR. It is further submitted that as the scheme sanctioned by the BIFR is not on record, it is not clear as to whether in fact there is any reference to the pending proceedings and/or whether the BIFR has considered the said aspect while considering the scheme or not.

Mr. Raval, learned advocate appearing on behalf of the respective Petitioners/workmen has heavily relied upon the decisions of the hon''ble Supreme Court in the case of Eagle Flask Industries Ltd. Vs. Talegaon Dabhade Municipal Council and Others, and in the case of Jay Engineering Works Ltd. Vs. Industry Facilitation Council and Another, , in support of his submission to permit the Labour Court to proceed further with the T. applications and other allied matters and adjudicate the dispute, keeping all the questions with respect to applicability of Section 22 open, to be considered when any award is sought to be executed against the company. It is submitted that, in fact, if the adjudication and further proceedings of the T. application is permitted and/or continued, it will save the time otherwise it would further delay the proceedings, which will adversely affect the workmen who are out of job since 1985.

It is submitted that the object and purpose of the proceedings under the BIER is to restructure and revive the company but simultaneously the intention cannot be to kill the workmen, as in the present case, the workmen are out of job since 1985. Therefore, it is requested to allow the present special civil application.

The present petition is opposed by Mr. Kamal Trivedi, learned senior advocate appearing on behalf of the Respondent-company. It is submitted that in the facts and circumstances of the case, considering Section 22 of the SICA, the Industrial Tribunal has rightly allowed the revision application and suspended the further proceedings of T. applications and other allied matters till the workmen obtain consent from the BIER. It is submitted that the scheme sanctioned by the BIER is under implementation and therefore, any proceedings having financial implications, are required to be stayed, otherwise it will affect the entire scheme sanctioned by the BIER, which is for restructuring and revival of the company.

It is submitted that the company is closed since 2000 and at the relevant time there were 5,662 workmen and thereafter due to the rehabilitation scheme sanctioned by the BIER, which is valid for 10 years, the said scheme is being operated and implemented, more than 2,500 workmen have got voluntary retirement scheme (VRS) and at present there are only 3,500 workmen in the Respondent-company.

Mr. Trivedi, learned senior advocate appearing on behalf of the Respondent-company has heavily relied upon the decision of the Division Bench of this Court in the case of Abad Dairy v. Manjibhai Dhanjibhai reported in (2000) 3 GLH 409 , as well as another decision of the learned single judge in the case of Morarji Desai Textile Labour Co-operative Industries Ltd. Vs. Thakorebhai Dhulabhai Patel,

Relying upon the above decisions and making the submissions aforesaid, it is requested to dismiss the present special civil application.

Heard the learned advocates appearing on behalf of the respective parties.

At the outset, it is required to be noted that all the Petitioners were serving with the Respondent-company and are without any employment/ job since the year 1985. As their services came to be terminated by the Respondent-company, they have raised industrial disputes under the Bombay Industrial Relations Act by submitting T. applications ranging from 1985. It appears that the Respondent-company approached the Board under the provisions of the SICA being Case No. 104 of 2000 for declaring it as a sick undertaking and the said case came to be finally decided on October 30, 2002, wherein the scheme has been framed for rehabilitation of the Respondent-company. It appears that the T. applications of 1985 and other T. applications are still pending and the Respondent-company submitted application before the Labour Court, Nadiad to quash and set aside the proceedings initiated by the Petitioners before the Labour Court, Nadiad. The learned presiding officer of the Labour Court, Nadiad vide order dated December 18, 2003, dismissed the said application holding that in the scheme there is no provision to quash and set aside the proceedings before the labour court/industrial court. That being aggrieved by and dissatisfied with the order passed by the Labour Court, Nadiad dated December 18, 2003, in rejecting the applications submitted by the Respondent-company to quash and set aside the proceedings initiated by the Petitioners before the labour court, the Respondent preferred Revision Application (ICN) No. 1 of 2004 and the learned member of the industrial court by the impugned order has allowed the said revision application by quashing and setting aside the order passed by the Labour Court, Nadiad dated December 18, 2003, in T. Application No. 62 of 1985 and other allied matter by further passing an order to suspend the proceedings in the aforesaid T. applications till the Petitioners obtain consent from the BIFR. Hence the Petitioner has preferred the present special civil application under Article 226/227 of the Constitution of India.

It is mainly contended on behalf of the Respondent-company that in view of the rehabilitation scheme sanctioned by the BIFR, the proceedings before the Labour Court initiated by the Petitioners by way of T. applications are to be quashed and set aside and/or they are to be suspended till the consent from the BIFR is obtained. At the outset, it is required to be noted that the Respondent-company has not produced on record the scheme sanctioned by the BIFR. It is also required to be noted that the respective Petitioners are out of job since 1985 and the Respondent-company approached the BIFR in the year 2000 only. It is very unfortunate that even after 15 years the T. applications of 1985 were not decided and disposed of by the Labour Court. Now, considering the contention and submission on behalf of Respondent No. 2, the Petitioners are still required to wait till adjudication of the respective T. applications which are sought to be suspended by Respondent No. 2. As stated above, the services of the respective Petitioners have been terminated in the year 1985, i.e., prior to 24 years and it will be very difficult for the Petitioners and their family members to survive. The bar u/s 22 of the SICA would be applicable only at the time when there will be financial implication and award is sought to be implemented/executed having financial implications. In the meantime, the proceedings may go on and only at the time of execution of the award having financial implications, the bar u/s 22 of the SICA can be made applicable and at that stage the respective Petitioners/ employees may be directed to obtain consent from the BIFR.

In the case of Jay Engineering Works Ltd. Vs. Industry Facilitation Council and Another, while considering the award under the Arbitration and Conciliation Act, 1996, vis-a-vis Section 20 of the SICA, the hon''ble Supreme Court has observed that adjudicatory process on making an award under the Act of 1993 may not come within the purview of the 1985 Act but once an award is made to be executed it shall come into play.

Even in the case of Eagle Flask Industries Ltd. Vs. Talegaon Dabhade Municipal Council and Others, while considering Section 22 of the SICA, the hon''ble Supreme Court has observed and held that the effect of Section 22 is to be considered only when there is a demand for recovery and the question of recovery would arise only when there is quantified demand on assessment. Therefore, the hon''ble Supreme Court has permitted the municipal council to make an assessment and quantification of the octroi duty payable and only after the quantification is done and assessment is made as provided in law, question of recovery would arise and at that stage effect of Section 22 can be considered.

Considering the above two decisions of the hon''ble Supreme Court, the adjudication by the Labour Court in the aforesaid T. applications cannot be stayed and the proceedings cannot be suspended. As observed by the hon''ble Supreme Court only after adjudication and the award is declared, the effect of Section 22 of the SICA can be considered. In view of the aforesaid two decisions of the apex court, the decisions of this Court relied upon by the Respondents and reference to hereinabove are not of any assistance to them.

In view of the above, the impugned judgment and order passed by the Industrial Tribunal in suspending the proceedings of the T. applications filed by the respective Petitioners deserves to be quashed and set aside and the Labour Court is required to be directed to proceed further with the adjudication of the T. applications and after the award is declared, the effect of Section 22 of the SICA can be considered. However, there is no justification to suspend the proceedings before the Labour Court which have been initiated way back in the year 1985 and to stay the further proceedings and adjudication thereof.

In view of the above, the present petition succeeds. The impugned order passed by the Industrial Tribunal at Nadiad in Revision Application (ICM) No. 1 of 2004 is hereby quashed and set aside. Let the Labour Court, Nadiad adjudicate upon the T. applications submitted by the respective Petitioners and thereafter when any award is declared by the Labour Court, Nadiad, the effect of Section 22 of the SICA can be considered. The Labour Court, Nadiad is hereby directed to decide and dispose of the T. application No. 62 of 1985 and other allied matters in accordance with law and on merits at the earliest but not later than six months from the date of the receipt of this order. Rule is made absolute to the aforesaid extent. In the facts and circumstances of the case, there shall be no order as to costs.