Management of Wavin India Ltd. vs Presiding Officer, Principal Labour Court and Others

E. Padmanabhan, J.—The above batch of writ petitions have been filed by the petitioner, the management of Wavin India Ltd., praying for

the issue of writ of certiorari to call for and quash the common award dated March 31, 1997, passed by the first respondent-Principal Labour

Court Chennai, in I.D. Nos. 195 to 200, 240 and 241 of 1990 and 701, 702, 703, 704, 705, 706, 707, 708, 709, 710, 711, 712 and 713 of

1990.

Heard Mr. A.L. Somayaji, learned senior counsel for Mr. A.R. Gokulnath appearing for the petitioner, and Ms. Geetha for Mr. Fenn Walter for

all the respondents in all the writ petitions.

It is fairly stated by either side that the facts leading to the filing of these writ petitions are identical and all the writ petitions could be disposed of

by a common order as the contentions are one and the same in all the writ petitions. It is sufficient to refer to the facts in one of the writ petitions, as

practically, there is no difference in facts from one industrial dispute to another dispute or one writ petition to another writ petition.

For convenience, W. P. No. 5684 of 1998 is taken up and it would be sufficient to refer to the facts leading to the above writ petition.

The petitioner-management is engaged in the manufacturing of P.V.C. pipes and the second respondent-workman was employed in the

petitioner''s factory. According to the petitioner-management, the workmen who were working in the Madras factory submitted a charter of

demands as the earlier long term settlement came to an end on February 28, 1986. The petitioner-management accepted certain demands in the

interest of industrial peace and wanted the operational problems like effective manpower, utilisation and both productivity to be discussed and

agreed as a part of the settlement. There had been a total non-cooperation and incessant stoppage of work by the workmen from the year, 1983,

onwards, which resulted in a huge loss of production year by year and the workmen also constantly interfered with the operations and thereby

reduced the productions and also adopted a go slow practice.

A settlement was arrived at on January 14, 1988, yet the workmen failed to give the agreed normal and required production and on the other

hand resorted to an illegal stay in strike claiming that they will work only as per their grades and they will not carry out the work assigned to them

by the management as was done hitherto for several years. The workers suddenly wanted to choose their own work and refused to carry out the

work assigned to them. This was brought to the notice of the union president by the management. Subsequently, on March 7, 1988, the workmen

resorted to an illegal gherao of the management staffs, which was reported to the Assistant Commissioner of Labour on March 10, 1988.

Even during the conciliation, the workmen refused to give any reason for their stay in strike and their refusal to carry out the work. Hence, an

industrial dispute, L D. No. 81 of 1989, was raised and the same is pending. The production for the year 1987 was only 1272.566 metric tonnes,

which is far below the normal production to achieve break even and not to talk of profitability. During the first three months of the year 1988, the

total production was only 318.790 metric tonnes. The production had come to a stand still and the workers deliberately damaged the machinery.

The petitioner-management incurred heavy loss year after year and the resultant loss exceeded Rs. 5 crores wiping off the entire reserve and

capital.

In the circumstances, the petitioner-management was compelled to and decided to close down the Madras factory. The petitioner issued the

prescribed notice dated October 17, 1988, to the Commissioner and Secretary to Government in the prescribed Form R-3 and also intimated the

Government about the petitioner''s intention to close the Madras factory with effect from December 17, 1988. Apart from that, once again on

November 17, 1988, another notice was sent to the Government as well as to the individual workman, as prescribed by Section 25-FFF of the

Industrial Disputes Act, to 52 of the workers apart from the management assistants numbering 26.

The management paid salary to the management assistants and in managerial cadre, even though the factory was not functioning from March to

November, 1988. The closure compensation and other benefits payable were also paid by the petitioner to the respondent-workmen, which the

workmen have received and encashed the same. The respondent-workman in these writ petitions alone had raised the industrial dispute as if he

had been retrenched when all other workers admitted the closure and received the compensation without any protest.

It is further pointed out by the petitioner-management that the second respondent-workman set up a false case as if the workman had reported

for duty on December 17, 1988, but he was denied the work and, therefore, it amounts to retrenchment, besides contending that for the closure,

the management has not followed the procedure prescribed under the Industrial Disputes Act. The second respondent-workman failed to disclose

the closure notice and the compensation received from the petitioner-company. In the said industrial dispute raised by the second respondent in

each of the writ petitions, the petitioner-management filed a detailed counter resisting the proceedings.

In the common enquiry, conducted by the second respondent-Labour Court, the workmen examined V. Balasubramanian as W.W.-1 on their

behalf and the petitioner-management examined M.W.-1, S. Gunasekhara Pandian, on their behalf. The workmen marked exhibits W-1 to W-7

while the writ petitioner-management marked exhibits M-1 to M-52 in support of their respective claims.

Common evidence has been recorded in all the disputes raised by the workmen u/s 2-A(2) of the Industrial Disputes Act and the management

had also let in common evidence in ail the industrial disputes filed by the 21 workmen. By an identical award dated March 31, 1997, the second

respondent-Labour Court passed one set of common award in I.D. No. 195 to 200, 240 and 241 of 1990 and another set of award, which is

also identical in all respects was passed on the same day in I.D. Nos. 701, 702, 703, 704, 705, 706, 707, 708, 709, 710, 711, 712 and 713 of

1990 except there being a difference in the name of the workmen, there is no other difference.

The first respondent-Labour Court by its common award ordered reinstatement of the workmen with continuity of service, full back wages and

other attendant benefits. The award of the Labour Court was published in the Government Gazette dated July 31, 1997.

The petitioner-management moved the apex Court as against the award of the first respondent-Labour Court and the Supreme Court by order

dated February 27, 1998, directed the petitioner-management to approach this Court and further directed the writ petitions to be disposed of at

the earlier point of time. Thereafter, the present writ petitions have been filed by the writ petitioner-management challenging the award of the first

respondent-Labour Court on various grounds.

In these batch of writ petitions, rule nisi came to be ordered. Pending the writ petitions, the workmen filed applications for direction u/s 17-B

of the Industrial Disputes Act and this Court issued directions. Being aggrieved the writ petitioner-management preferred writ appeals before the

Division Bench and the Division Bench affirmed the directions issued by this Court. As against the same, the writ petitioner-management moved the

Apex Court in SLP Nos. 16302 to 16338 of 1999. The Supreme: Court granted interim stay of the directions issued by this Court and requested

the High Court to make it convenient to dispose of the pending writ petitions, at the earliest. Hence, these batch of writ petitions were ordered to

be consolidated by the Chief Justice and were taken up out of turn and listed before this Court. Common arguments were advanced by the counsel

for either side. It is to be pointed out that the second respondent-workman had not filed a counter in the writ petition but only supported the

common award of the Labour Court in all the writ petitions.

Mr. A.L. Somayaji, learned senior, counsel appearing for the writ petitioner-management, raised number of contentions, while Ms. D. Geetha

appearing for the first respondent-workman in all the writ petitions, contended that no interference is called for.

Mr. A.L. Somayaji, vehemently contended that it is a case of closure and the conclusion of the Labour Court that it is an illegal termination and

further direction issued to reinstate the respective worker is illegal, suffers from error apparent on the face of the record and vitiated by material

misdirection. The learned senior counsel also contended that the first respondent Labour Court had neither considered the evidence of M.W.-1 or

W.W.-1 in its entirety and it had not only failed to consider the entire evidence of W.W.-1 but also had misread the evidence.

It is also pointed out by learned senior counsel for the petitioner that the Labour Court had omitted to consider the material exhibits produced

by the writ petitioner-management in support of its case that it is a closure and it is not a termination or retrenchment as sought to be made out by

the workmen and the failure to consider the material documents produced by the management also vitiates the impugned award.

Learned senior counsel elaborated his contentions and the entire approach and conclusions of the first respondent-Labour Court is perverse,

besides being contrary to law. It is also contended that the first respondent-Labour Court had failed to apply its mind to the evidence placed

before it and it had committed an illegality in assuming that the petitioner-management had reopened its factory during the year 1991, without any

basis or any evidence placed before the Labour Court and the inference drawn by the Labour Court as if the factory had been revived or

reopened during the year, 1991, is based on no evidence.

Learned counsel also referred to the evidence of M.W.-1, who had deposed that the machinery are not working since the date of closure and

there is no production at all since then. Learned counsel also referred to exhibit M-34, wherein the State Government declined to make a reference

sought for by the workmen on the sole reasoning that the management had closed the factory after giving notice with effect from December 7,

1988, and paid the closure compensation to the above workmen.

Learned counsel also contended that not only exhibit M-24 and other exhibits, which are relevant which has got a bearing on the issues

required to be decided had been omitted to be considered, even though detailed arguments were advanced by Mr. A. R. Gokulnath, who had

appeared before the first respondent-Labour Court. It is further pointed out that the workmen who have been served with notice of closure, in

terms of the statutory provisions have also received the closure compensation without any demur, besides the closure notice had been sent to the

appropriate authorities. It is also vehemently pointed out by the petitioner-management that the first respondent Labour Court misdirected itself in

concluding that the workmen ought to have been given preference and employed as if they have been retrenched and as if the factory commenced

production and such an inference had been made on an erroneous assumption. The Labour Court had not only ordered reinstatement of the

workmen but also directed payment of back wages, which award cannot be sustained at all. It is also being pointed out by the counsel for the

petitioner that the Labour Court had mechanically exercised its discretion without reference to the facts and circumstances of the case and the

impugned award, it is submitted, is liable to be quashed as there is no legal evidence to support the same.

Per contra, Ms. D. Geetha, learned counsel appearing for the workmen, have also strenuously contended that no interference is called for and

it is a case of illegal termination and, therefore, the award of the Labour Court is not liable to be interfered with. Learned counsel for the workmen

sought to sustain the award of the Labour Court by pointing out the portions of the evidence as well as documents, namely, exhibits marked on

either side. However, Ms. Geetha, learned counsel for workmen at the same time fairly admitted that the evidence as a whole or material

documents or exhibits have not been referred or considered and there is omission on the part of the Labour Court. However, Ms. D. Geetha

persuasively contended that it is a case of illegal termination and not a closure nor a retrenchment.

Counsel for either side persuaded this Court to go through the entire case and counter-case, entire evidence of W.W.-1 and M.W.-1 as well

as exhibits W-1 to W-7 and M-1 to M-52 and render a finding as if it is a Court exercising original jurisdiction, which is impermissible in law.

Demonstrably the consideration of evidence by the first respondent-Labour Court is not only slipshod but also perverse. Further, it is also

admitted that the Labour Court had failed to advert to and consider the material portion of the evidence let in by either side excepting incorporating

a particular portion of the evidence of M.W. 1. The evidence of W. W.-1 also had not been considered in its entirety but there is a reference to the

evidence of M.W.-1.

The first respondent Labour Court also proceeded on an erroneous view, as if, when a charter of demand was pending, there could be no

closure at all, which approach of the Labour Court also cannot be sustained. The Labour Court also refers to exhibit M-21, the closure notice

issued as well as the acknowledgment M-22 to M-28, and also the payment of closure compensation by the management, which compensation

has been received by the workers, without demur. The following portion of the award passed by the first respondent-Labour Court would

demonstrate the total non-application of its mind to the facts of the case and it had failed to marshal the evidence of the respective parties and this

failure has resulted in miscarriage of justice.

But W.W.-1 would admit that notices have been served to each worker along with certain amount alleged to have been closure compensation.

Therefore, it is clear that the establishment was closed on December 16, 1988, as found in the evidence of M.W.-1.

A perusal of exhibit M-34 would go to show that while the charter of demands were pending the establishment cannot be closed and exhibits M-

22 to 28 are acknowledgment for receipt of notice and closure compensation.

Equally so, there are certain portions of evidence of M.W.-1 which the first respondent-Labour Court had failed to advert and some of his

submissions were overlooked.

Thus, it is clear from the evidence of M.W.-1 that the petitioner-management is running the factory from the year, 1991.

It is also admitted by M.W.-1 that persons were brought to operate the machines.

If that being so, as rightly contended by learned counsel appearing for the petitioners, preference ought to have been given to the retrenched

workers after the closure of the company. But the respondent has not done so. Therefore, the petitioners are entitled to the reliefs asked for by

them in their respective disputes.

It is rightly pointed out by learned counsel for the petitioner that W.W.-1 had admitted the closure notice, payment of closure compensation

and closure of the factory on December 16, 1988. That being so, then the question that requires to be decided is whether it is a closure, as defined

in Section 2(cc) of the Industrial Disputes Act, and the further question whether the provisions of Section 25-FF had been followed or not. In this

respect, the first respondent-Labour Court had failed to advert nor it has given a finding. The Labour Court had also not rendered a finding

rejecting the case of closure put forward by the petitioner-management. But it had preceded as if there has been an illegal termination as in its

inference, the factory which was admittedly closed on December 16, 1988, was revived after 1993 under a BIFR scheme. This inference is

disputed as factually not correct. Only on that premise, the Labour Court had arrived at a conclusion that the petitioner-management had failed to

give employment to the workers, as if they have been retrenched.

However, according to the management, it is a case of closure and the State Government had also declined to make the reference as it is a

case of closure only after the State Government declined to make a reference the individuals have raised a dispute u/s 2-A(2) and sought to raise

the dispute. The maintainability of which is also one of the questions deserves to be decided.

On a perusal of the award of the Labour Court, this Court is unable to find a specific finding excepting the conclusion that the workers are

entitled to be reinstated with back wages and continuity of service neither a finding has been recorded on the issue whether it is a case of closure?

Whether the closure pleaded is true and valid? Whether it is a case of retrenchment? or whether there is illegal termination? or whether the factory

had revived its operation within two years from the date of the alleged closure? or whether the factory under the BIFR scheme had started

functioning and if so from which date? All these questions which are material had not been adverted nor a finding has been rendered by the Labour

Court. Hence the award of the Labour Court cannot be sustained as it had failed to consider and record its findings on the above material issues or

points.

This Court hasten to add that the evidence let in by either side is wanting in certain respects and further even that the Labour Court also had

failed to advert not only to the material portion of the evidence but also failed to consider some of the admissions in evidence let in by either side.

In the circumstances, in view of the illegalities pointed out above and in the nature of the order which this Court proposes to pass ultimately, it

is not expressing any opinion nor would it be proper for this Court to appraise the evidence as if it is a Court of original jurisdiction while exercising

the powers of judicial review under Article 226 of the Constitution.

The Labour Court is expected to frame proper points that arise for consideration in the dispute raised before it, marshal the facts and evidence

and record its conclusions in respect of each one of the points in dispute and, thereafter, should pass an award. In respect of all the above aspects,

there is a total failure on the part of the Labour Court further, the Labour Court also had committed an illegality and error apparent on the face of

the record in holding that there could be no closure much less valid closure merely because, certain charter of demands were pending and the

parties were dragging their feet for a considerable period. The errors pointed out were apparent on the face of the record and these errors pointed

out would show that there has been failure to exercise the jurisdiction vested in the first respondent-Labour Court. This Court sitting in article 226

will not be justified in appreciating the evidence and passing a fresh order as if it is a Court of original jurisdiction. The ultimate conclusion of the

Tribunal being illegal termination, the contention of counsel for the petitioner that such a conclusion is perverse and it suffers from obvious and

patent errors on the face of the record cannot be brushed aside and deserve to be sustained.

The only conclusion or finding arrived at by the Labour Court is based on pure assumptions and conjectures and it could be stated that there is

no legal evidence to support such a conclusion. It is equally well-settled that normally this Court would not interfere with the award of the Labour

Court on hyper-technical grounds frustrating the entire adjudication process before the Tribunal and this Court has to exercise the power of judicial

review as far as possible to sustain the award made by the Industrial Tribunal instead of picking holes here and there as has been held by the Apex

Court in Calcutta Port Shramik Union Vs. Calcutta River Transport Association and Others, .

It is not the case here, as for various reasons pointed out above, the award of the Labour Court not only suffers from an infirmity of error of

law apparent on the face of it but also had failed to exercise its jurisdiction vested in it. There are very many errors of law on the face of the record

and the findings also borders on perversity.

It is also fairly stated that the Tribunal had ignored legal evidence available on record and had picked up portions of evidence and this warrants

interference. The ultimate conclusion is also contrary to evidence. There is no legal evidence to support such a conclusion and no reason have been

assigned in support of the ultimate conclusion or finding.

In the circumstances, there is no other alternative except to quash the award of the first respondent-Labour Court and remit the matter back to

the Labour Court for fresh consideration while giving liberty to either parties to let in evidence such further or other evidence, which they may

choose. It is needless to add that the Labour Court shall frame the appropriate points for consideration and also record its finding with respect to

the material issues when there is controversy on a particular point between the parties to the dispute.

The workmen had been without employment since December 18, 1988, and they are virtually on the streets for twelve long years. Directions

issued u/s 17-B also had not been given effect to in the light of the orders of the stay passed by the Supreme Court. The workers are without any

income or remuneration and it is too difficult for them to conduct the proceedings unless they are paid some amount towards their succour and also

to conduct the proceedings. The writ petitioner had also gone before the Board for Industrial and Financial Reconstruction (BIFR) for

rehabilitation scheme. The BIFR appointed the Central Bank of India as the operating agency.

However, to enable the workmen to face the grave situation, which they have been facing for the past 12 years, this Court is inclined to issue

direction taking into consideration the totality of the circumstances and the plight of the workmen as well as the conditions of the writ petitioner-

management to pay a sum of Rs. 10,000 to each of the workmen, as an ad hoc payment, who is the second respondent in each of the writ

petitions within six weeks from today and the Labour Court after the management filing a memo evidencing payment, shall conduct the remanded

enquiry and proceed expeditiously by taking the reference out of turn and at any rate within six months from the date of communication of this

order. If for any reasons the writ petitioner-management fails to pay Rs. 10,000 to each of the workmen, it is open to the workmen to seek for

recovery of the said amount of Rs. 10,000 as if it is an interim award by invoking the provisions of the Revenue Recovery Act. The interim

direction issued in the special circumstances of the case and the amount ordered to be paid is only as an interim award as there is prima facie case

for the workmen as well. The parties shall bear their respective costs in this writ petition.

The writ petitions are allowed and the matter is remitted back to the first respondent-Labour Court to dispose of the matter expeditiously.