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Judgment
Ajit Kumar Sinha, J.
W.P.(L) No. 6663 of 2002
In the instant writ petition the petitioner prays for an appropriate writ, order or direction from this Hon''ble Court for quashing the award dated 30th July, 2002 passed by the Presiding Officer, Labour Court, Deoghar in ID Reference Case No. 1 of 1996. The petitioner further prays for a writ, order or direction commanding upon the concerned respondents to prohibit the respondents from taking any steps pursuant to the impugned award.
W.P.(L) No. 480 of 2003
In the instant writ petition the petitioner prays for issuance of an appropriate writ, order or direction for quashing the relevant part of the award dated 30.7.2002 passed in Reference Case No. 1/96 by the learned Presiding Officer, Labour Court, Deoghar by which it has been held interalia that petitioner is not workman and as such he is not entitled to get salary and all benefits payable to him since the date of order of voluntary retirement.
The issue involved in both the writ petitions are identical so both the writ petitions are being disposed of by this common order.
The facts, in brief, are set out as under:In the year 1979 the Jasidih factory of the petitioner company which earlier belonged to Tata Oil Mills Company Ltd. (hereinafter referred to as ''TOMCO'') started production under the TOMCO Manager later in the year 199091 the business of TOMCO was on the decline and it suffered a loss of over Rs. 16 crores and at the same time it amalgamated with Hindustan Lever Ltd. who is the petitioner herein. The issue of amalgamation was also subject matter of challenge before the High Court of Bombay and the matter was finally set at rest by the Hon''ble Supreme Court dismissing the objection raised against amalgamation vide its order dated 28.12.1994. The TOMCO employees union challenged the scheme of amalgamation. The appeal preferred by the TOMCO employees union challenging the scheme of amalgamation was dismissed while upholding the scheme of amalgamation and the same is reported in Kailash Vs. State U.P, . The petitioner thereafter filed application on 29.12.1994 before the Registrar of company u/s 391(2) read with Section 394(1) of the Companies Act to make the amalgamation effective from that date. Likewise on 21.3.1995 an application was filed before the income tax authority where extension of voluntary retirement scheme was sought which was approved by the Income Tax Department on 26.7.1994 for the period from April, 1995 to March, 1996. Pursuant to the V.R.S. scheme being floated 31 employees including 29 workmen opted for V.R.S. under the said scheme and submitted their resignation and between April, 1995 to January, 1996 the concerned 31 employees named in the order of reference received full and final settlement of their dues and claims including the amount payable under the said V.R.S. scheme, gratuity and provident fund. A bipartite settlement u/s 2 (P) read with Section 18(1) of the Industrial Disputes Act was entered into and as per the requirement under Rule 61 (4) of the Industrial Disputes (Bihar) Rules, 1961 the copies were sent to the different authorities. A detail chart with the copies of letter of expenses and settlement are also annexed with the writ petition. A dispute was raised thereafter and the appropriate Government vide its order dated 24.5.1996 made the following reference before the Labour Court for adjudication of the following issues:" Whether the termination of service of 31 workmen named in the Annexure-A of M/s Hindustan Lever Limited, Jasidih under the Voluntary Retirement Scheme by the Management is proper? If not, what relief the workmen is entitled to?''
The petitioner company initially challenged the maintainability of reference in a writ petition C.W.J.C. No. 10814 of 1996 before the High Court on 10.10.1996. However, during the pendency the number of employees in Jasidih Unit came down to zero and it was not possible to pay idle wages and almost all the employees were either transferred and or separated under a voluntary separation, package made available since April, 1996. The Hon''ble High Court vide its order dated 20.5.1998 directed the Labour Court to decide the preliminary issue of maintainability after hearing the parties. The learned Labour Court vide its order dated 4.8.1997 inter alia held that it was not possible to give a finding regarding employer-employee relationship and the same was without any evidence on record which led to filing of fresh writ petition C.W.J.C. No. 9327 of 1997 by the petitioner company on 10.10.1997 challenging the aforesaid order dated 4.8.1997. The same was disposed of vide order dated 20.5.1998 by the Hon''ble High Court with a direction to decide the matter preferably within three months with liberty to challenge the same before appropriate forum. The petitioner company preferred an appeal and the Hon''ble Division Bench was pleased to uphold the order of learned Single Judge dismissing the appeal vide its order dated 9.9.1998. The petitioner company finally and formally declared the unit as closed with effect from 01.06.1999 as per the provisions of Section 25(FFF) of the Industrial Disputes Act, 1947 and it also clarified that there was no scope of application of Section 25(O) or Section 25(FF) (A) under the said Act. The learned Labour Court gave its impugned final award on 30.7.2002 in favour of the respondent employees holding that the separation under V.R.S. scheme was not proper and the ex-employees except Anil Kumar and K.N. Mondal were entitled to get salary and all benefits payable to them since the date of their respective retirement till the factory in question was closed in accordance with the letter. It also held that the workmen will be further entitled to the compensation in accordance with the provisions laid down u/s 25(F) of the Industrial Disputes Act, 1947. The petitioner being constrained has challenged the aforesaid impugned award in the present writ petition.
The main contention raised by the petitioner company is as to whether the reference was maintainable more so when statutory settlement was entered into voluntarily by choice of the employees accepting the V.R.S. scheme. It has further been submitted that once the workman accepted the money under the said V.R.S. scheme and appropriated the same without any objection and or protest in any manner whatsoever, could the workmen again agitate the same and term it as termination of service. The second contention raised by the learned senior counsel for the petitioner is that the learned Labour Court on its own had framed the following six issues which was neither proposed by either side and the same came to light only in the impugned order which is on the face of it illegal and beyond the scope of Reference. The issues framed by the Labour Court are as under:
Whether the Reference is maintainable?
Whether the workmen have got valid cause of action for the reference?
Whether the closure of the production and the factory was legal and in accordance with law?
Whether the workmen accepted the alleged voluntary retirement of their own accord and free will or under the undue influence or coercion exercised by the management?
Whether the termination of services of 31 persons/workmen named in Annexure-A of M/s H.L.L. Jasidih under voluntary retirement scheme by the management is proper?
If not, what relief the workmen are entitled to ?
In view of the aforesaid it has been contended that only the first issue was under reference and thus the Learned Tribunal traveled beyond the scope of Reference and has committed error of jurisdiction in recasting by adding new issues on its own without affording any opportunity and the same was reflected only in the impugned Award when it was pronounced. The next contention raised by the learned Senior counsel is that once the employees voluntarily and by way of choice specific accepted the benefits under voluntary retirement scheme, they are not permitted to approbate or reprobate and they cannot be permitted to resile from their earlier stand more so when they had accepted the payment and or benefit under the scheme. It has further been submitted that even under the provisions of Contract Act the same is binding and enforceable. It has further been contended that termination is an act of an employer vide which the employee is removed from the services whereas voluntary retirement is an acceptance of a scheme by the workman and can by no stretch of imagination termed as termination by the employer of the service of workmen more so when it was by its own volition and choice specific.
The learned Counsel for the respondents workmen per contra has submitted that the present case has a chequered history and the workmen are innocent and helpless people suffering at the hands of high powered petitioner management. It has further been contended on behalf of the respondents that under Article 38 read with 39 special emphasis are made on the welfare of the workers as laid down in Article 42, 43 and 43-A of the Constitution of India. Article 43-A was introduced by the 42nd amendment to the Constitution and thereafter the concept of welfare state emerged in order to end the exploitation of workmen. It has further been contended by the learned Counsel for the respondents that the concept of collective bargaining found place pursuant to the amendment in Section 2 (P) under the Industrial Disputes Act. Likewise, settlement was an agreement between the employer and the workmen and Section 18(1) makes such a settlement arrived only after process of collective bargaining on the parties to the agreement of settlement. It has further been specifically pleaded that the management acted with malafide and the same was discussed in the judgment of the Hon''ble Supreme Court also that the method was not clear and fair and in particular it has referred to and relied upon para of the judgment to support its contention and prove the malafide on the part of the employer.
It has further been contended that the law provides for security of the benefits of the workman and is deterrent against reckless, unfair, unjust and malafide closure by the employer. The legislative intent in framing Section 25(O) of the Industrial Disputes Act has to be understood in this regard to understand the malafide designs of H.L.L. management of the petitioner. The learned Counsel for the respondents further submits that it was a total case of unfair trade practice adopted by the management and the entire action was under duress since the criteria of granting V.R.S. clearly was difficult to comprehend and the workmen were forced to accept under threat of transfer. It has further been contended that the voluntary retirement scheme was never notified to the workmen and no negotiation took place with the union and it is a case of basic human rights which cannot be binding more so when it is between unequals as laid down in several judgments.
I have considered the submissions, the pleadings and the relevant provisions of the Industrial Disputes Act as well as the case laws referred to and relied upon by the parties to this Writ Petition.
The first issue raised by the learned Senior Counsel for the petitioner is as to whether the learned Labour Court traveled beyond the scope of reference and exceeded its jurisdiction.
The reference was confined to the issue of termination under Voluntary Retirement Scheme but the learned Labour Court framed as many as six issues in the impugned award and the same were re-casted on its own and was reflected in the award for the first time without affording any opportunity in this regard. In a recent judgment reported in 2009 (2) SCC 177 U.R. Birupakashpa v. Sarva Mangla and Ors. it has been conclusively held that issues should not be framed without assigning reason and without giving reasonable opportunity of hearing and the same has been held to be unsustainable in the eyes of law as it suffers from jurisdictional error. In State Bank of Bikaner and Jaipur Vs. Om Prakash Sharma, , the Hon''ble Supreme Court had held as under:
In the instant case, the Award of the Labour Court suffers from an illegality which appears on the face of the record. The jurisdiction of the Labour Court emanated from the order of reference. It could not have passed an order going beyond the terms of the reference. While passing the award, if the Labour Court exceeds its jurisdiction the Award must be held to be suffering from a jurisdictional error. It was capable of being corrected by the High Court in exercise of its power of judicial review. The High Court, therefore, clearly fell in error in refusing to exercise its jurisdiction. The Award and the judgment of the High Court, therefore, cannot be sustained. Consequently, the appeal is allowed and the judgment of the High Court is set aside. The award is set aside to the extent of order of reinstatement.
Again in 2004 (9) SCALE 479, the Hon''ble Supreme Court at paragraph 34 held as under:
...Furthermore, the Labour Court having derived its jurisdiction from the Reference made by the State Government, it was bound to act within the four-corners thereof. It could not enlarge the scope of reference nor could deviate there from. A demand which was not raised at the time of raising the dispute could not have been gone in by the Labour Court being not the subject matter thereof.
The second issue relates to closure and as to whether it was in violation of Section 25-FFF and 25-FFA of the Industrial Disputes Act. Since 1999, the erstwhile Unit under TOMCO Management was closed and none of the workmen were working when the factory closed in 1999. On 31.05.1999 i.e. the date of issuance of notice of closure there was no workman left and thus, the company was under no obligation to serve notice to the appropriate Government u/s 25-FFA and the workmen u/s 25-FFF of the Industrial Disputes Act and thus the findings of the respondent Labour Court in this regard is on the face of it wholly misconceived and erroneous. The definition of closure and lock out is provided u/s 2(cc) and 9(1) of the Industrial Disputes Act which is quoted as under:
2(cc)-Closure means the permanent closing down of a place of employment or part thereof.
2(1) - Lockout means the temporary closing of a place of employment or the suspension of work, or the refusal by an employer to continue to employ any number of persons employed by him.
It is evident from the definitions stated above that one cannot be equated with other. Secondly, the main work is place of employment and admittedly, nothing has been placed before the Labour Court that the petitioner Company ever closed the place of employment prior to 1.6.1999. Thirdly, stoppage of production by the management and enjoyment of idle wages by the workmen cannot be equated with closure of place of employment and, lastly, the erstwhile TOMCO management or the present management never declared lock out at any point of time. The learned Labour Court erred in equating Lock out to temporary closure in the instant case.
In view of the observation made herein above it is established that the decision of the Respondent Labour Court pertaining to closure is not only beyond the scope of the Reference but also suffers from error of facts and law.
The third issue is as to whether the voluntary retirement will amount to termination and/or retrenchment from service. Before adverting to the merits of the matter, it is relevant to refer to the definition clause of retrenchment u/s 2(OO) of the Industrial Disputes Act.
2(OO) - Retrenchment means the termination by the employer of the service of a workman for any reason whatsoever, otherwise than as a punishment inflicted by way of disciplinary action but does not include-
a) Voluntary retirement of the workmen: or
b) ***
c) ***
d) ***
There is no dispute about the settled law that termination is an act and order of the employer for any reason and the same amounts to retrenchment except when it is inflicted by way of punishment and or when it falls under the four exception which includes Voluntary retirement. Voluntary retirement is in any case by way of choice specific, accepted by the workman followed by payment to the workmen as per the Scheme and agreement and it cannot be equated or termed as retrenchment and or termination. Even this issue is no more res-integra and has been conclusively decided in a catena of judgments. In ''J.K. Cotton Spinning & Weaving Mill Co. Ltd. v. State of U.P. and Ors. 1990 Labour IC 151 SC '' it was clearly held that acceptance of voluntary retirement made by the employee will not amount to termination of service by the employer.
The Hon''ble Supreme Court in a catena of decisions has held that the employees after accepting the benefits under the Scheme are not permitted to approbate and reprobate nor can they be permitted to resile from their earlier stand. The Hon''ble Supreme Court in Bank of India and Ors. v. O.P. Swarnakar 2002 (9) SCALE 519 at paras 116, 117, 118, 120, 121) while considering an identical issue held as under:
***Those who accepted the ex gratia payment or any other benefit under the Scheme, in our considered opinion could not have resiled therefrom.
*** The employees concerned having accepted a part of the benefit could not be permitted to approbate and reprobate nor can they be permitted to resile from their earlier stand.
**** As a general rule any person can enter into a binding contract to waive the benefits conferred upon him by an Act of Parliament, or, as it is said, can contract himself out of the Act unless it can be shown that such an agreement is in the circumstances of the particular case contrary to public policy. Statutory conditions may however be imposed in such terms that they cannot be waived by agreement....
In the case of Punjab National Bank Vs. Virender Kumar Goel and Others, the Hon''ble Supreme Court took the similar view. The relevant portion of the judgment reads as follows:
As noticed in our judgment, having accepted the benefit under the Scheme by withdrawing and utilization thereof they are not permitted to approbate and reprobate.
Placing reliance on the case of Bank of India v. O.P. Swarnakar (Supra) the Hon''ble Supreme Court in the case of Punjab and Sind Bank and Another Vs. S. Ranveer Singh Bawa and Another, held as follows:
***Therefore the principles of estoppel extensively discussed by this Court in the case of Bank of India v. O.P. Swarnakar (Supra) applies to the facts herein. The conduct of respondent No. 1 indicates his knowledge about payments in his accounts, that he never objected to such payments and that he had appropriated the amount for his benefit. Therefore, he cannot resile from the Scheme.
Thus, it will be evident on reading of the aforesaid settled law that voluntary retirement cannot be termed as retrenchment and or termination of services and the reference to that effect was unsustainable in the eyes of law.
The respondents have further contended that the entire action was by way of fraud, undue influence and coercion. The aforesaid terms have been defined u/s 15, 16 & 17 of the Indian Contract Act. However, the ingredient/requirement as mentioned u/s 15, 16 & 17 of Indian Contract Act has neither been proved nor established by the respondent Union for the reasons that none of the workman ever protested against the voluntary retirement scheme nor did they accept the money or the benefits under any reservation or protest and thus the observation of the Labour Court in this regard that it suffers from unfair labour practice is unsustainable and erroneous. There is no dispute about the fact that the payment chart which is annexed to the petition clearly showed that the application under the VRS scheme were made by the workmen and payment was made to the workmen between 19.04.1995 to 17.01.1996 respectively and during that period of 10 months no one raised any objection or any such ground at that point of time. It was by way of choice specific and free will of the workmen concerned and they were signatory to the settlement after acceptance of the benefit under the Scheme and thus, having accepted the benefit utilized the amount, signed the settlement estoppel by conduct will certainly apply against such workmen and to raise such contention subsequently is an afterthought.
The Hon''ble Supreme Court in Gyanendra Sahay Vs. Tata Iron and Steel Co. Ltd., clearly reiterated the settled law that suspicion and doubt cannot take the place of evidence and no finding of fact can be given on mere doubt or suspicion on the basis of baseless allegation. This was the view taken by the Hon''ble Supreme Court in an identical situation where the appellant therein had written letter of voluntary retirement and after having accepted retiral benefit without any protest held that they cannot turn around and say that they were compelled to submit premature voluntary retirement. It is also a settled law that maintainability of a reference can certainly be agitated since it refers to a jurisdictional issue and the same is always subject to judicial review by the High Court under its Writ Jurisdiction and this issue is no more resintegra and has been upheld time and again by the Hon''ble Supreme Court. In The Nedungadi Bank Ltd. Vs. K.P. Madhavankutty and Others, the Hon''ble Supreme Court at paragraph 8 held as under:
It was submitted by the respondent that once a reference has been made u/s 10 of the Act a Labour Court has to decide the same and the High Court in writ jurisdiction cannot interfere in the proceedings of the Labour Court. That is not a correct proposition to state. An administrative order which does not take into consideration statutory requirement or travels outside that is certainly subject to judicial review, limited though it might be. The High Court can exercise its power under Article 226 of the Constitution to consider the question of the very jurisdiction of the Labour Court.
Again in Arun Kumar and Others Vs. Union of India (UOI) and Others, at paragraph 76 and 77 it was held as follows:
In Halsbury''s Law of England it has been stated -
Where the jurisdiction of a tribunal is dependent on the existence of a particular state of affairs, that state of affairs may be described as preliminary to or collateral to the merits of the issue. If at the inception of any enquiry, by an inferior tribunal, a challenge is made to its jurisdiction, the tribunal has to make up his mind whether to act or not and can give a ruling on the preliminary or collateral issue but that ruling is not conclusive.
The existence of jurisdictional fact is a sine qua non or condition precedent for the exercise of power by a Court of limited jurisdiction.
The next issue with regard to Res Judicata cannot be sustained in the eyes of law. It is pertinent to mention that this Hon''ble Court in connection with earlier Writ Application being W.P.(L) 42/02 (W.P. page 345) pertaining to instant Reference has directed as follows:
By the next date whether the Reference case No. 1/96 is determined or not, this Court will take up the question of maintainability of Reference case in question.
It is, therefore, submitted that none of the decisions of this Hon''ble High Court can act as a resjudicata. On the one hand, the Hon''ble Court in CWJC No. 9327/97 directed the Labour Court to consider the entire matter and the same was also upheld by the Division Bench. As per settled position of law the Hon''ble High Court in W.P.(L) No. 42/02 has rightly held that the maintainability point would be decided by this Hon''ble Court whether or not the same has been decided by the Labour Court. Thus the principles of Res Judicata cannot apply since there was no adjudication of the issue of maintainability by the High Court.
As regards the next issue/contention of contract between unequals and its enforceability it is relevant to clarify that in Brajonath Ganguli 1983 SC 156 the issue was with regard to unfettered discretion in a service contract between the State and its citizens. The Hon''ble Supreme Court held that such a clause which confers such discretion which provided that the service of an employee in public employment can be terminated for any reason whatsoever by giving him a notice of a month violated Article 14 of the Constitution and was also violated Section 23 of the Contract Act. Thus, the question therein was as to whether a Court or Tribunal was entitled to find out the true nature of order by lifting the veil to find as to whether the termination was punitive or not. Whereas in the instant case the facts are completely different and it is not a case of punitive termination and thus the ratio has to be referred in the context before relying upon a decision. In the instant case the issue relates to VRS and as to whether it was hit by undue influence, coercion or fraud and will amount to termination which has been answered in the negative in the earlier paragraphs.
There is no dispute about the fact that in the instant case a bipartite statutory settlement was entered into u/s 18(1) of the Industrial Disputes Act read with Rule 61 (4) of the I.D. Act (Bihar Rules), 1961. Section 18(1) of the I.D. Act deals with such settlement arrived at by an agreement between employer or workmen otherwise than in accordance with the conciliation proceeding and the same are binding to the parties to the agreement. The difference between Section 18(1) settlement and Section 18(3) settlement is that the latter is arrived at during conciliation proceedings. Even the contention with regard to violation of Section 25(O) of the I.D. Act is erroneous in view of the admitted position even as per the Award that the number of workmen engaged at the relevant time were less than 100. 19. Considering the aforesaid facts and circumstances of the case, the Writ Petition (L) No. 6663 of 2003 is allowed and the impugned award dated 30.07.2002 passed by the Presiding Officer, Labour Court, Deoghar in I.D. Reference case No. 1/96 is quashed. However, the Writ Petition (L) No. 480 of 2003 preferred by the petitioner therein in the facts and circumstances is accordingly dismissed with no order as to cost.