Kistna Cements Limited vs Government of Andhra Pradesh and Another

T.N.C. Rangarajan, J.—This writ petition has been filed by the management of Kistna Cements Limited.

The cement factory with which we are concerned known as Kistna Cements Works, originally belonged to Associated Cement Company Limited. By an agreement dated 16-12-1989, it was agreed to be purchased by Frazer Investment Limited, as a running factory with all its assets and liabilities and with continuation of the employment of the workmen. Thereafter, it was being run by HMP Cements Limited. Again by an agreement dated 26-4-1993, the factory was transferred to Kistna Cements Limited, being incorporated on 6-1-1993. Earlier to that date, Kistna Cements Limited Employees Union had raised certain demands of which the following five were pending: (i) uniform and safety shoes to be given to the workers in January every year; (ii) 1992 annual promotions and special increments; (iii) new appointments to the children of the deceased employees as well as death compensation; (iv) dues to the co-operative stores; and (v) recovery of dues of Employees Co-operative Credit Society not remitted to the society. On 17-3-1993, the union wrote a letter mentioning of the above pending matters and requested the Assistant Commissioner of Labour to arange for a joint meeting to discuss the problems. On 26-4-1993, the Assistant Commissioner of Labour admitted this dispute to conciliation and wrote to the management of HMP Cements Limited to respond to the demands. By letter dated 6-9-1993, HMP Cements Limited replied to the Assistant Commissioner of Labour that the company''s financial position was deteriorating and, therefore, it was not possible to meet these demands, particularly when the workmen were sitting idle and not co-operating with the management.

While the matters stood thus, the company put up a notice dated 12-5-1993 in the notice board on 14-5-1993 and also informed the union that the Kistna Unit of HMP Cements Limited has been transferred to Kistna Cements Limited under the agreement dated 26-4-1993 and that all the employees will be absorbed by Kistna Cements Limited with all the benefits which they have been enjoying. As desired by the Union, the relevant extracts from the said agreement was also supplied to it by letter dated 15-5-1993. Thereupon, on 17-5-1993, the Union wrote to the Labour Commissioner stating its apprehension that the new management may not run the unit or pay salaries or may change the working conditions particularly because the production had stopped and requested that immediate action should be taken. On this representation, the Joint Commissioner of Labour requesting for a meeting. However, on 29-5-1993, the management put up a notice stating that the workmen were obstructing the removal of the goods and were interfering with the management functions and if such obstruction is continued, the management will be compelled to take appropriate action. The same day, the Union wrote a letter to the management stating that after the discussions in the joint meeting with the Minister, both the management and the union had agreed not to take any action that causes concern to workers, and denied any obstruction as alleged, and requested the management not to put up baseless notices. A second notice was put up by the management on the same day stating that the workmen were indulging in certain unlawful activities and called upon the workmen to desist from such activities. Thereafter, on 30-5-1993, a notice was put up stating that the workmen have been holding unlawful assemblies and threatening the personnel with danger to their lives and properties resulting in a panic, and in view of the deteriorating conditions of the company''s stability and economy, there was no alternative than to declare suspension of work with immediate effect. On the same date; the Union wrote a letter to the Deputy Commissioner of Labour to intervene immediately. Thereafter, a tripartite meeting was held on 2-6-1993 in the chambers of the Deputy Commissioner of Labour and he advised the management to lift the lock-out and report on 4-6-1993. But, on3-6-1993, the management informed the Deputy Commissioner that it had come to a decision that it was not possible to lift the suspension of work pending settlement in connection with the smooth running of the factory at the appropriate level. On the same day, the management also wrote a letter to the Minister for Labour pointing out the adverse factors affecting the viability of the factory such as high man power, increased cost of electricity and transportation of lime-stone, and the non-cooperative attitude of the workers, for which two instances were given viz., that two shovels operating at Sitaramapuram mines which were very old and for which spares were not available had to be taken to Shahabad works for repairs, but the workmen objected and did not allow the shovel be shifted: that the limestone was lying scattered and the quarry workers did not allow deployment of contract labour to direct the lime-stone to the Klin''s Pay Loader, and the workmen also prevented the return of the substitute roller given by Shahabad Works. Similar instances have been given regarding the obstructive attitude of the workmen stating that because of non-co operation, it was not possible to run the factory.

On 3-6-1993, the Deputy Commissioner of Labour sent a factual report to the Government stating that immediately on receipt of the representation of the union dated 30-5-1993, regarding the lock-out, the matter was admitted into conceiliation, but the management and the workmen disputed the fact that there was any obstruction to the work and, therefore, the declaration of the lockout was not in accordance with the provisions of The Industrial Disputes Act, and the management was advised to lift the lock-out immediately, and since the management refused to comply, a report u/s 12(4) of The Industrial Disputes Act, was enclosed. That report, also dated 3-6-1993, is a confidential report which has also incorporated the history of the matter including the earlier demand letter dated 17-3-1993, the company''s reponse to that, the subsequent developments in the factory leading to the lock-out, concluding that the cement industry being a public utility service, the management cannot declare lock-out without prior notice and hence, the lock-out should be declared as illegal and deterrent action should be taken against the management. He, accordingly, recommended that the lock-out should be prohibited by referring the following issues for adjudication:

Whether the Kistna Cement Works Employees Union is justified

(1) in demanding uniforms and safety shoes for the year 1993 also as has been supplied every year;

(2) annual promotions and special increments to the workmen for the year 1992; and

(3) appointments to the sons of the dead employees and also death compensation.

The Minister for Labour decided to hold a meeting on 25-6-1993 between the management and the employees and issued a notice, but the management was absent. He, accordingly decided to prohibit the lock-out and refer the issue for adjudication. Consequently, G.O.Rt.No. 1178, dated 25-6-1993 was issued referring the three issues mentioned above for adjudication by the Industrial Tribunal. G.O.Rt.No. 1179, dated 25-6-1993, was issued prohibiting the lockout.

Thereafter, on 5-7-1993, the management filed writ petition No. 9101/93 challenging the validity of the CO., prohibiting the lock-out. According to the management u/s 10(3) of The Industrial Disputes Act, lock-out or strike cart be prohibited only when dispute in connection with that lock-out or strike is referred, and in the present case, according to the management, the real dispute was the non-co-operation of the workers and not the earlier demands for uniforms etc., and hence, by referring the earlier demands the Government had no jurisdiction to prohibit the lock-out. The Government has filed a counter-affidavit stating that the issues referred were the subject matter of the dispute between the parties and was linked to the declaration of the lock-out and, therefore, the prohibition of the lock-out was justified.

The learned counsel for the petitioner argued that as held by the Supreme Court in Delhi Administration, Delhi Vs. Workmen of Edward Keventers and Another, , that if the Government desires to prohibit the lock-out u/s 10(3), it must give scope for the merits of the dispute which led to the lock-out, being gone into by the adjudicatory body and unless that is referred, the lock-out cannot be prohibited. It was pointed out that the body of the factual report dated 3-6-1993 in the present case referred to the obstruction by the workers, and the real dispute was not referred particularly when the management had complained that there was no danger to the lives of the staff. According to the learned counsel for the petitioner, the real dispute was only that of the non-co-operation by the workers and as long as that dispute was not referred, the lock-out cannot be prohibited. Reliance was placed on the decision of the Supreme Court in Ram Avtar Sharma and Others Vs. State of Haryana and Another, , to contend that reference cannot be refused if the dispute is between the management and the workman and, hence, the Government cannot omit the real matter of dispute and issue a prohibitory order. Reliance was also placed on the decision of the Supreme Court in The Management of Express Newspapers Ltd. Vs. Workers and Staff Employed under it and Others, , and it was pointed out that in that case the question whether the action of the employer which followed the strike by the employees, amounts to a lock-out or a strike, was referred specifically by the Supreme Court itself, with the observation that such a reference was required to adjudicate the real dispute between the parties. The learned counsel also pointed out two other infirmities in the impugned order viz. that it did not refer to the letter of the management to the Minister explaining the difficulties in running the factory; and that it also considered the suspension of work as illegal on the assumption that Cement Industry was publicity utility, and in fact, there was no notification stating that it was a public utility.

The learned Government Pleader submitted that earlier there was a notification by the State Government on 12-6-1985 and subsequently notifications have been made by the Central Government, which indicated that there must have been notifications in the interregnum also. But, no specific notification declaring cement industry to be a pubic utility at the relevant point of time, has been produced before us. In any case, this issue is not very germane to the main point urged by the petitioner as to the reference of the real dispute between the parties. The learned Government Pleader contended that the demands raised by the workmen initially, were the basic demands in respect of which the management had eventually suspended the work, particularly when the workers had disputed that they had indulged in any obstructive activities in the meanwhile. It was submitted that the action of the management in declaring the lock-out was only a consequence of the basic demands, and once the basic demands were referred to adjudication, the consequential action of lock-out can be prohibited.

The learned counsel for the workmen supported this stand of the Government Pleader, and contended that the G.O., prohibiting the lock-out was in the nature of an interlocutory order in a reference relating to the main dispute, which was only the original demand for uniforms etc. It was submitted by the counsel that by making vague allegations against the workmen, the original demand cannot be converted into somethingelse, particularly when no details of the obstructive tactics of the workmen had been given, either at the time when the workmen demanded or even in the writ petition. The workmen also allege mat a record has been subsequently created by writing a letter to the Minister on 3-6-1993 to show as if there was a great difficulty in running the factory, which indicates the very intention of the new management to close the factory rather than run it. He also referred to the decision in A.P. Electrical Equipment Corporation v. Its Staff Union 1986 Lab.I.C. 1851, to suggest that a lock-out by itself cannot be an industrial dispute and therefore, until the main demand could be referred, as has been done in this case, the Government had the jurisdiction u/s 10(3) of the Act to prohibit the lock-out.

We have considered the submissions of both sides and we have also perused the record of the Government. The chronological events show that there was a subsisting demand for uniforms etc., with the then management HMP Cements Limited, which was raised by letter dated 17-3-1993. There was a separate conciliation proceedings by calling for the remarks of the management and the then management has also presented its case, by letter dated 6-5-1993. Thereafter, the change of management has been announced on 12-5-1993, which evoked certain apprehensions in the minds of the workmen which was expressed in the letter dated 17-5-1993. As it turned out, the management had putup notices complaining of non-co-operation, eventually leading to suspension of work on 30-5-1993. On that day, a fresh representation has been made by the workmen raising the issue of the lock-out itself, which has been admitted as conciliation proceedings, and failure-report has been sent by the conciliation officer. Thus factually, it could be seen that the fresh dispute of the workmen with the new management regarding the lock-out, was quite independent of the earlier dispute with the previous management. In fact, a perusal of the letter dated 17-5-1993 shows that even though they recalled the existing disputes with the old management, they expressed a strong feeling that the transfer of the unit will affect the benefits and service conditions of the workers, and requested the Commissioner of Labour to safeguard their interest. From this it is very clear that there was a fresh cause of action and that too against the new management, while the old dispute was still pending unresolved. However, the new dispute was quite different and since it was precipitated by the lock-out, the real dispute was only that specified in the letter dated 3-6-1993 by the management stating that it was not possible to lift the suspension of work pending settlement in connection with the smooth running of the factory, at the appropriate level. In other words, the allegation of the management that the workmen did not co-operate in running the factory, was the genesis of the lock-out, and even though the workmen disputed it, it was not for the Commissioner of Labour to adjudicate on that, but it was only for the Industrial Tribunal when the matter is referred to it. It may be that the conceiliation officer was of the prima facie view, after enquiring with the workmen, that there was no obstruction by them, but the fact was that the management was unwilling to lift the lock-out without an assurance of cooperation by the workmen.

The learned counsel for the workmen contended that lock-out cannot be regarded as an industrial dispute, as held in A.P. Electrical''s case(4 supra). In that case also, there was an agitation by the workers, and the management declared lock-out. When the Government prohibited the lock-out, the management filed a writ petition challenging the same on the ground that such a prohibition cannot be made without a prior notice. In that case, eight workmen had been dismissed and tine dispute regarding the dismissal had been referred and consequently, the lock-out was prohibited. It can be seen that on the facts of that case, the lock-out was a clear sequel to the dismissal of the workmen and, therefore, the Government had the jurisdiction to prohibit the lock-out when the dismissal of the workmen had been referred to adjudication. After discussing the scheme of Act, it was observed in para 10 of that order that the lock-out cannot be said to be an industrial dispute within the meaning of Section 2(k) and that learned counsel for the petitioner did not place any decision in support of his contention. The learned counsel for the petitioner herein pointed out that u/s 7, the industrial disputes specified in the II schedule can be referred to the Labour Court, and item 5 in the II schedule was "legality or otherwise of a strike or lock-out". Moreover, Section 10(1) empowers the Government to refer any dispute relating to the matters specified in the II schedule, for adjudication. Since the learned counsel appearing in that case had not brought these provisions to the notice of the learned Judge, it was not possible to accept the contention of the learned counsel for the respondent that the validity of the lock-out cannot be referred to adjudication. As pointed out by the learned counsel for the petitioner, in the Indian Express (3 supra), the validity of the lock-out was framed as a question by the Supreme Court for reference. In the decision under discussion (A.P. Electrical''s case), there was an assurance by the workmen both before the conciliation officer as well as before this Court that they will co-operate, and the learned Judge took that into account in confirming the prohibition of the lock-out. In the present case, even though certain issues like supply of uniforms, were pending, a fresh issue arose due to the transfer of the undertaking and the apprehensions of the workman about the security of their jobs leading to the lock-out. Therefore, the question whether the workmen are obstructing the smooth running of the factory was a new, live and real dispute for adjudication, particularly when it was disputed by the employees. Until that issue is referred, the lock-out, which is a sequel to that issue cannot be prohibited. In our opinion, therefore, the impugned G.O., prohibiting the lock-out is unsustainable because it has not referred the dispute in connection with such lock-out, for adjudication, because u/s 10(3) of the Act, continuance of a lock-out can be prohibited only if it is in connection with the dispute which is referred under that section. We, therefore., quash the impugned G.O. Writ petition is allowed. No costs.