National Jute Manufacturers Corporation vs State of West Bengal

Shree Rang Misra, J.—Petitioner, a Central Government Undertaking and a Company within the meaning of the Companies Act, 1956 namely National Jute Manufacturers Corporation has approached this Court under Article 226 of the Constitution of India for a writ of mandamus declaring the award dated January 29, 1988 passed by the Respondent No. 2 Is bad in law and also from proceeding further with the notice dated June 16, 1988, vide Annexure ''E'' issued in connection with the said award in Case No. VIII-184/79 and declaring Respondent No. 1 and 2 have no jurisdiction under the law to proceed with the said award. Brief facts giving rise to this writ petition stated by the Petitioner are as follows:

Petitioner is a Central Government undertaking and it is a company within the meaning of the Companies Act, 1956. The Petitioner is entitled to get all the benefits and to have the protections as available and provided under the Constitution of India and laws of the Company.

The Respondent No. 3 was engaged by the previous National Jute Company as a ''Badli Carding Helper'' in the mechanical department on September 6, 1969. As per prevailing system in case of Badli worker the Respondent No. 3 was given a particular token.

The said Respondent No. 3 was never a permanent workman of the previous company but was a Badli workman, and his name stood in the Register ''Mill Badli Burcan'' of the company. It is an established practice in the Jute industry that ''Badlis'' are as such treated as casual workers and their services are put off from the rolls after the stipulated period of work is over. The question of termination of their services does not arise since they are not permanent workers of and in fact the services of the Respondent No. 3 was not terminated in that sense.

The Respondent No. 3 did not turn up at the ''Mills Labour Bureau'' after August 22, 1976. The Respondent No. 3, however, alleged that his services was terminated without any charge sheet or without any enquiry such allegations of the Respondent No. 3 has got no merit in view of the facts stated in the proceeding paragraph.

Petitioner craves leave to refer to a copy of the petition or the written statement and also the Award to ascertain the correct facts if at all the same become necessary.

Because, the main points which are involved in the present proceedings are different as will appear hereinafter.

Petitioner states that the undertaking of the National Jute Company was taken by the Central Government vide National Company Limited (Acquisition and Transfer of Undertaking) Act, 1980. Thereafter Jute Companies (Nationalisation) Act, 1980 came into force when the said undertakings of the National Company which was previously vested in the Central Government again vested in the National Jute Manufacturers Corporation, the Petitioner herein.

After the Jute Companies (Nationalisation) Act came into force on December 21, 1980 the right, title and interest in respect of the said National Jute Mill Co. Ltd. along with other Jute Companies as mentioned in the said Jute Companies (Nationalisation) Act, 1980 vested in the National Jute Manufacturers Corporation.

In terms of the said Jute Companies (Nationalisation) Act, 1980 it is the assets and not the liabilities which vested in the Petitioner.

It has been provided under Sub-Section (6) of Section 4 of the said Act that ''if on the appointed day, any suit, appeal or other proceeding of whatever nature in relation to any matter specified in Sub-Section (2) of Section 5, in respect of the undertakings, of any Jute Company which has vested in the Central Government u/s 3, instituted by or against that company is pending the same shall not abate, be discontinued or be, in any way, prejudicially effected by reason of the transfer of the undertakings of such jute company or of anything continued in this Act, but the suit, appeal or other proceedings may be continued, prosecuted or enforced by or against the Central Government or where the undertakings of such jute company are directed u/s 6, to vest in the Jute Manufacturers Corporation, by or against that Corporation.

The said provisions save any suit, appeal or other proceeding of what ever nature, only in relation to any matter specified in Sub-section (2) of Section 5 which provides; as follows:

(2) Any liability arising in respect of loans advanced by the Central Government or any State Government or both, to Jute Company (together with interest due thereon) after the management of the undertakings of the said Jute Company has been taken over by the Central Government shall on and from the appointed day, be the liability of the Central Government and shall be discharged by that Government and shall be discharged by that Government, or by the Jute Manufacturers Corporation as and when repayment of such loans becomes due and payable.

For the removal of doubts, it is further declared under Sub-Section (3) of Section 5 as follows:

(a) Save as other wise expressly provided in this Act. no liability specified in Sub- Section (2) of any Jute Company in relation to its undertakings in respect of any period prior to the appointed day, shall be enforceable against the Central Government or where the undertakings of such Company are directed u/s 6, to vest in the Jute Manufacturers Corporation, against that Corporation.

(b) No award, decree or order of any Court, Tribunal or other authority in relation to the undertakings or any Jute Company passed after the appointed day, in respect of any matter, claim or dispute, which arise before that day, not being a matter claim or dispute in relation to any liability specified in Sub- Section (2) shall be enforceable against the Central Government or where the undertakings of such company are directed u/s 6 to vest in the Jute Manufacturers Corporation against that Corporation.

Thus, accordingly, Petitioner has no liability with regard to any past liability of Jute Company or it does not come u/s 5(2) of the Act. It has also been urged that any liability against a Jute Mill the Act provides for the payment of the same by the Commissioner of Payment who has been vested with the liability to disperse in accordance with the guidelines prescribed in the Acts.

It has been urged that the Respondent No. 3 admittedly was not in the employment immediately before the appointed day as on his own admission he was terminated from his service in August 1976 i.e. prior to the appointed day. Therefore, the award passed by the Respondent No. 2 is without jurisdiction. Affidavit-in-Opposition has been filed and it has been stated in the said affidavit that the averment in the writ petition on behalf of the Petitioner that the Respondent No. 3 is not entitled to reinstatement and there is no liability on the part of the Petitioner for the payment of any dues including a reinstatement of earlier employer i.e. Jute Company is without any substance. No such points have been urged on behalf of the Petitioner before the Respondent No. 2. Second Industrial Tribunal and the Petitioner is stopped from challenging the order of the Tribunal and their further averment in the writ petition that in view of the provisions of the Acts, National Jute Manufacturers Corporation will have no liability and it is not enforceable without any substance and on a true interpretation of the provisions of the said Acts, the award is in forcible and as this question was not urged before the Tribunal this Hon''ble Court may not permit the Petitioner to raise this plea at this stage.

Having heard the learned Counsel for the Respondent No. 3 and having perused the writ petition, affidavit-in-opposition and the provisions of the Jute Company''s Nationalisation Act and the National Jute Company Ltd. (Acquisition and Transfer of Undertakings) Act 1980 in substance three questions arise:

(1) Whether the Petitioner is entitled to raise a point which was not taken before the tribunal though the Petitioner was impleaded as a party and what will be the effect of not raising plea available to the Petitioner.

(2) Whether in view of the provisions of the Jute Company''s Nationalisation Act hereinafter referred to by the Act, the award of the Industrial Tribunal is enforceable against Petitioner.

(3) To what relief Respondent No. 3 is entitled.

It is the admitted case between the parties that the Respondent No. 3 that on a reference before the Second Industrial Tribunal (Where termination of Services of Sri Panchkari Bhuinya was justified as to whether he was entitled to any relief). A plea of jurisdiction was taken before the tribunal and a preliminary hearing on the question of jurisdiction, the tribunal came to the conclusion that the proceedings are maintainable and after considering the materials placed before the tribunal, it came to the conclusion that the services of the Respondent No. 3 was terminated without complying mandatory requirement of law has laid down under the Industrial Dispute Act. The tribunal further recorded the following findings:

That apart, it has been proved in this case not only from the pleadings but also from the evidence of Panchkari Bhuinya that he worked for more than 240 days continuously before his retrenchment. According to Clause 13 of the standing orders, seven days notice was necessary even in the case of a Badli workman but the company has not let any evidence whether any such notice was served upon the workman before this retrenchment.

Thereafter the tribunal also recorded the finding that the workman should be re-instated in the position in which he was prior to retrenchment and also he was entitled to be paid back wages by the company.

Ultimately, the tribunal directed the National Jute Manufacturers Corporation to re-instate and to pay back wages. The question arises as to whether the award of the tribunal is enforceable against the Petitioner though admittedly Petitioner has not taken this plea before the tribunal but as this is a pure question of law and it goes to the root of the matter, no determination of question of fact is involved and only provision of Act of 1980 is to be considered and in the light of the same, it is to be determined whether any award could be enforced after the Act of 1980 against the Petitioner, in view of this, the argument on behalf of the Respondent No. 3 that since this point has not been raised by the Petitioner before the Tribunal, the Petitioner is not permitted to urge this point for the first time in writ jurisdiction which is without substance and accordingly, I proceed to decide the question involved in the case. According to the Petitioner that in view of the provisions of Section 6 of Sub-Section 4 read with Section 5 of Sub-Section 2, the Petitioner has no liability at all for anything done prior to the appointed date i.e. December 21, 1980. He has also urged that Section 12(1) of the said Act provides that every person who has been immediately before the appointed date in any undertaking of any of the Jute Undertakings shall become employee of the National Jute Manufacturers Corporation Ltd.

A perusal of the same it is clear that a person who was dismissed prior to the appointed day, who might be re-instated by the Tribunal will not be an employee on the appointed date. The learned Counsel has also brought to the notice of the Court provisions of Section 14 of the Coal Mines (Nationalisation Act) which provides for continuance of an employee of certain employment. The learned Counsel for the Respondent No. 3 has made emphasis on the judgment of the Supreme Court in the case of The Workmen Vs. The Bharat Coking Coal Ltd. and Others, and accordingly, it was urged that the case of the Respondent No. 3 is exactly the same which was before the Apex Court and as such the Respondent No. 3 has rightly been granted relief prayed for by the Tribunal, since the Tribunal has held that the services of the Respondent No. 3 was illegally terminated without following the procedure and the Company having taken over by the Government Company in 1980. The liability of the re-instatement lies with the Petitioner and also to pay back wages at least from the date of nationalisation.

The question for determination is whether the award of the Tribunal is enforceable against the Petitioner. Sub-Section 6 of Section 4 of the Jute Company''s Nationalisation Act, 1980 provides as under:

If on the appointed day, any suit, appeal or other proceeding of whatever nature, in relation to any matter specified in Sub-Section (2) of Section 5, in respect of the undertakings, of any Jute Company which has vested in the Central Government u/s 3, instituted or preferred by or against that company is pending the same shall not abate, be discontinued or be, in any way, prejudicially affected by reason of the transfer of the undertakings of such Jute Company or of anything contained in this Act, but the suit, appeal or other proceedings may be continued, prosecuted or enforced by or against the Central Government or where the undertakings of such Jute Company are directed u/s 6, to vest in the Jute Manufacturers Corporation, by or against that corporation.

Section 5 of Sub-section (2) which reads as follows:

Any liability arising in respect of loans advanced by the Central Government or any State Government or both, to a Jute Company (together with interest due thereon) after the management of the undertakings of the said Jute Company had been taken over by the Central Government shall, on and from the appointed day, be the liability of the Central Government and shall be discharged by that Government, or by the Jute Manufacturers Corporation as and when repayment of such loans becomes due and payable.

A perusal of Section 5(1) makes it clear that every liability other than the liability specified in Sub-Section 2 of Section 5 of the Jute Company in respect of any claim prior to the appointed day shall be the liability of the Company and shall be enforceable against it and not against the Central Government or whether the undertakings of the Jute Company vests in the Jute Manufacturers Corporation against that corporation. It goes to show that an award passed by the Tribunal in relation to any liability not specifying in Sub- Section 2 of Section 5 after the appointed day, such an award shall be enforceable against the company, that is against the Respondent No. 4. An award if any passed by the Tribunal is in enforceable only against the company but not against the Government Company. But it will be the liability of the original employer (company) whose undertaking has been taken over by the Government.

It has also been urged on behalf of the Petitioner that in substance, Section 12(1) provides that every person who has been immediately before the appointed day employed in any of the Jute Company shall become on and from the appointed day an employee of the Central Government or the Government Company as the case may be Admittedly, the Respondent No. 3 was not employee before the appointed day. He was dismissed long prior to the appointed day. Accordingly, if an award passed reinstating him, he cannot be reinstated by the Government Company, namely the Petitioner. Attention has also been drawn to Section 17 of the Cooking Coal Mines (Nationalisation) Act, 1972 which refers to every person who is workman within the meaning of the Industrial Disputes Act, 1947 and has been appointed immediately before the appointed day in the employment of Coal Mines shall become on and from the appointed day an employee of the Central Government or the Government Company as the case may be.

20 A perusal of Section 2(0) of the Industrial Disputes Act, 1947 workman includes a dismissed workman.

Accordingly, if the award is made in favour of such a dismissed workman he will be entitled to continue in the employment of the Central Government or the Government Company. Such is not the case under the Nationalisation Act of 1980. There is no such parallel provisions that an employee would be a person who is a workman under the Industrial Disputes Act, 1947.

Therefore, the benefit cannot be given to an employee whose services were purported to have been terminated and whose favour the Tribunal may ultimately pass an award. The judgment of the Apex Court reliance on which has been placed by the learned Counsel for the Respondent No. 3 is a case depending on the provisions of the Nationalisation Act of 1972.

A perusal of the judgment of the Apex Court, it makes it clear that Section 17 of Act of 1972 is of a special nature relating to workman and their continuation in service notwithstanding the transfer from private ownership to the Central Government or Government Company. This is statutory protection for the workmen within the meaning of the Industrial Disputes Act, 1947 and has immediately before the appointed day, in the employment of the mine, shall become an employee of the Government or the Government Company and continue to do so as laid down in Section 17. A workman is defined term. A similar controversy was subject matter of Civil Rule No. 2774(W) of 1982 where a learned Single Judge of this Court has held as follows:

Since the Jute Companies (Nationalisation) Act did not bring the concept of workmen as defined by the Industrial Disputes Act, 1947 a dismissed employee cannot take the benefit thereof.

This view also supports the view which is taken by this Court in the present writ petition.

A perusal of the Act of 1980, the concept of workmen defined under the Industrial Disputes Act, 1947, a dismissed employee cannot take benefit thereof. The Tribunal fails into the error in passing an award against the Petitioner though it is fact that this point that award after the Act of 1980 is not enforceable against the Central Government or the Government Company was not taken but yet when the provisions of the Act, 1980 was before the Tribunal, the Tribunal should have considered this aspects of the matter. On a perusal of the provisions of the Act and those of the Acts of 1972, it makes it clear that employee of a private Jute Company like the Respondent No. 3 if was in the employment on the date of Nationalisation, he will continue as such but if he was dismissed and was not in employment on the date of Nationalisation and has only initiated proceedings for his prior dismissal for reinstatement where he was employed of a private Company, there being no parallel provision like the provision of Act, 1972 where the word used was workmen, which means a dismissed employee also but in the present case an employee, who was actually in service on the date of Nationalisation alone or to be treated as employee of the Central Government or the Government Company but will not be covered a case of dismissed employee, dismissed prior to the date of Nationalisation. At the best, such an employee is entitled to enforce an award against the private Company and not against the Petitioner. In view of the finding of the Tribunal that the dismissal was in contravention of the provision of the standing order and the termination was bad in law, there being no challenge of such finding even after receipt of notice no one has appeared on behalf of the Respondent No. 4. The finding of the Tribunal holding the termination as bad and an order for enforcing an award for the reach of the termination of employment viz. termination, which becomes bad and it is open for the Respondent No. 3 to proceed against the Respondent No. 4. Since the Tribunal has allowed the claim of the Respondent No. 3 against the Petitioner alone, the order of the Tribunal cannot be sustained in view of the provisions of the Act, 1980, the question then arise as to whether the Respondent No. 3 is left without a remedy or he has some remedy under the law. It is true that the award of the Tribunal cannot be enforced against the Petitioner to that extent, the writ petition is liable to succeed, but at the same time it is open for the Respondent No. 3 to enforce the award against the Respondent No. 4, if so, advised and it is also open for the Respondent No. 3 to approach Compensation Commissioner for appropriate amount of damages as it is not possible to reinstate him against the Petitioner and if such an approach is made the Commissioner will award compensation in accordance with law and in case he has no fund, it is open for him to ask the Central Government in accordance with Section 25 for the grant of further amount in this regard, though in the normal Course in such a matter this Court direct the Tribunal to pass an order against the private Company but since the matter is pending for a long period while exercising power in Article 227, this Court as referred to above direct the Respondent No. 3 if law permits and advised to enforce the award against the Respondent No. 4, accordingly the award of the Tribunal Stand against the Respondent No. 4.

It will also open for the Compensation Commissioner to determine the amount of compensation which Respondent No. 3 may be liable towards his wages on account of the reinstatement which could not be enforced as the existence of the old company having come to an end but the computation of the amount of damages could be gone into by the Compensation Commissioner or to ask for a decision from the Tribunal for awarding amount in terms of damages after calling for such a finding.

Accordingly, the writ petition succeeds and is allowed. The order of the Tribunal dated January 29, 1988 is set aside. However, it is clarified that in case the Petitioner approaches the authority in accordance with law and the provisions of the Act, 1980 his claim may be considered as per the procedure prescribed and the decision in this petition will not stand as a bar for enforcing award against private company, Respondent No. 4 or for the payment of any of his dues which he is legally entitled provided law permits such a payment.

Under the facts and circumstances parties are directed to bear their own costs.