U.P. State Textile Corp. Ltd. And ... vs Presiding Officer Labour Court ...
2019 Latest Caselaw 4529 ALL

HIGH COURT OF JUDICATURE AT ALLAHABAD
 
 

A.F.R.
 
Judgment reserved on 01.5.2019. 
 
Delivered on 15.5.2019.
 
Case :- WRIT - C No. - 9703 of 2016
 
Petitioner :- U.P. State Textile Corp. Ltd. And Another
 
Respondent :- Presiding Officer Labour Court Jhansi And Another
 
Counsel for Petitioner :- Kartikeya Saran
 
Counsel for Respondent :- C.S.C.,Adarsh Kumar,Bansh Narain Rai
 

 
Hon'ble Saurabh Shyam Shamshery,J.

1. Uttar Pradesh State Textile Corporation Ltd., (petitioner no.1), which is a Government Company under the provisions of Companies Act, 1956, hereinafter referred to as the "Petitioner Corporation" which is presently under liquidation and petitioner no.2, Uttar Pradesh Vastra Katai Nigam Mill is the mill of the petitioner no.1, situated at Jhansi through their Managing Director have filed the present petition under Article 226 of the Constitution of India seeking following reliefs:

"(i) Issue a writ, order or direction in the nature of Certiorari quashing the impugned Award dated 28.08.2014 published on 14.10.2015, passed by the Respondent no.1, in Case No.02/2013.

(ii) Issue a writ, order or direction in the nature of mandamus, directing the respondents not to press recovery against the petitioners in pursuance of impugned Award dated 28.08,2014 published on 14.10.2015, passed by the Respondent no.1, in Case No.02/2013.

(iii) Issue any other writ, order or direction which this Hon'ble Court may deem fit and proper in the cirumstances of the case.

(iv) To award costs in favour of the petitioners."

2. Necessary facts for adjudication of the present writ petition are as follows:

(i) The petitioner Corporation was declared as a sick industry with effect from 02.2.1995 and the matter is pending before the Board for Industrial and Financial Reconstruction (hereinafter referred to as the "BIFR") wherein Indian Finance Corporation of India (IFCI) has been appointed as operating agency by the order dated 02.2.1995 passed by the BIFR under No.PSU (S) 609/94.

(ii) There is no dispute that presently no employees are working on the rolls of the petitioner corporation except the Managing Director nominated by the State Government and the holding of operational works of the petitioner Corporation are being looked after by the officials and employees of the U.P. State Spining Corporation Ltd. under the G.O. No.11.9.2000.

(iii) The BIFR has directed that modified draft rehabilitation scheme as approved by the State Government be submitted before the Bank of Baroda. Presently, the said scheme is under consideration before the Bank of Baroda. The workers of the petitioner corporation being under liquidation by their own will opted for Voluntary Retirement Scheme by submitting applications on different dates in the year 2001 and the workman working at the mill situated at Jhansi and who qualified under the Voluntary Retirement Scheme were paid the VRS dues and those who did not qualify were paid under the head of retrenchment compensation and gratuity in the year 2001 itself.

(iv) The said amount has been received by the workers without any protest. Some of the applications and receipts of amount are on record and the same has not been disputed by the respondent workman represented through Bhartiya Mazdoor Sangh (respondent no.2). The said voluntary retirement scheme is a scheme governed by certain notifications issued by the State Government.

(v) According to the petitioners, in order to clear the dues which occurred after November, 1997 and till 14.3.2001, the Corporation requested the State Government to sanction the amount of Rs.15.51 crores and the request is still pending. Some employees of the petitioner corporation raised a dispute through the respondent Union to declare them as a permanent workman and to grant all consequential benefits w.e.f. 1.1.1986.

(vi) The State Government referred the following issues under Section 4-K of the Uttar Pradesh Industrial Disputes Act, 1947 (hereinafter referred to as the "Act 1947") to the Labour Court, Jhansi under a notification dated 27.4.2012.

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(vii) The said dispute was registered as Case No.2/2013. A written statement was filed on behalf of the respondent Union wherein they have stated that the status of the workmen was treated as permanent workman as they have worked for 240 days in a year. Similarly, written statement has also been filed on behalf of the petitioner corporation wherein it has been stated that the respondent employees who were working in the mill at Jhansi, have already been paid the entire amount in pursuance of the VRS applied by the respondent employees. It was also submitted that as the petitioner corporation is under liquidation, no payment whatsoever could be paid to the employees till the final decision is taken by the BIFR, if still pending towards the VRS Scheme.

(viii) Written statement was also filed on behalf of the respondent employees. It was further submitted that the employees have not submitted any documentary evidence in support of claim made by them. It was also specifically asserted that the amount of Rs.15.51 crores has been sought from the State Government to pay the outstanding dues, however the said amount has not been paid to the petitioner corporation till date.

(ix) One of the employees has appeared before the labour court on behalf of all the respondent employees and stated on oath that each of the employee represented through Union in the present matter has worked for more than 240 days in each calendar year between 10 years to 20 years and due to completion of 240 days, the respondent employees have been given the status of permanent employees.

(x) The Presiding Officer of the Labour Court U.P. Jhansi by the impugned order dated 28.8.2014 decided the Industrial Dispute Case No.02/2013 holding that the respondent employees shall fall under the category of permanent employees and they are entited for all the benefits for the same. The Labour Court came to such conclusion only on the ground that the petitioner corporation has failed to produce any evidence to contradict the statement made that all the 81 employees of the respondent Union have worked for 240 days in one calendar year. The Labour Court also held that it has not been denied that in order to pay the outstanding amount to the employees of the Corporation amount of Rs.15.51 crores has been asked by the State Government, therefore, the Labour Court came to the conclusion that the said amount also includes amount required to be paid to the respondent employees. The said award is impugned in the present petition for writ.

(xi) In pursuance of the said award, the respondent Union has filed an application under sections 6-H, 6-H (2) of the Act, 1947 and Section 33 (1) and (2) of the Act, 1947 along with the computation chart for the payment of the outstanding amount as per the award. On the basis of such application, the Assistant Labour Commissioner, Jhansi has issued notice to the petitioner corporation under Section 6-H (1) of the Act, 1947 for recovery of amount of Rs.52,46,12,76/-. This notice is also impugned in the present petition for writ.

3. This court has passed the following order on 2.3.2016:

"Heard Kartikeya Saran, learned counsel for the petitioner and learned Standing Counsel appearing for the State respondents.

While assailing the impugned award passed by the Presiding Officer, Labour Court, Jhansi learned counsel for the petitioner submits that the petitioner is a sick company and relationship of employer and employee had ceased, therefore the Labour court has erred in passing the impugned award holding that the members of the respondent union are entitled to get demanded benefit.

Matter requires scrutiny.

Issue notice.

Notices on behalf of respondents have been accepted by the office of learned Chief Standing Counsel therefore notice need not be served again to the respondents.

Learned counsel for the respondents is granted six weeks' time to file counter affidavit. Rejoinder affidavit, if any, may be filed within two weeks thereafter.

List thereafter.

As an interim measure without prejudice to the right and contention of the parties, till the next date of listing operation of the impugned award dated 28.8.2014 passed by respondent no. 1 in Case No. 02/2013 shall remain stayed."

4. Counter and rejoinder affidavits have also been exchanged wherein averments raised by rival parties are generally denied.

5. Shri.Kartikeya Saran, learned counsel appearing on behalf of the petitioners contented that as all the dues under the scheme of VRS which is opted by the respondent employees by their own will has been paid and in the pleadings before the labour court, the respondent employees have not denied the payment made towards the VRS scheme.

6. Learned counsel further submitted that, once the closure was declared on 14.3.2001, the master-servant relationship between the petitioner and its employees ceased to exist. The respondent employees have failed to brought on record any evidence before the Larbour Court in order to discharge their initial burden that they have worked for 240 days in a calendar year. Counsel further argued that once the case is pending before the BIFR, no recovery proceedings could be initiated against the petitioner corporation as per the provisions of Section 22 (1) of the Sick Industrial Company (Special) Act, 1985, without prior consent from the BIFR and accordingly submitted that the impugned award has been passed without jurisdiction also.

7. Per contra Shri. B.N. Rai, learned counsel appearing on behalf of the respondent Union, submitted that there is no denial on behalf of the petitioner corporation that in order to clear the payment of outstanding dues of all the employees of the petitioner corporation, the corporation has requested the State Government for the payment of Rs.15.51 crores. Therefore, it has been admitted by the petitioner corporation that the said amount also included the outstanding amount to be paid to the respondent employees and this petition is filed only to delay the rights of the respondent employees.

8. On the basis of the payment receipt alleged to be paid in lieu of the VRS scheme, counsel submitted that in the said receipt, no amount has been paid towards the VRS scheme and only amount which has been paid was towards retrenchment compensation and gratuity. He further submitted that there is no bar on the Labour Court to decide any industrial dispute referred to it despite that the company is under liquidation and the matter is pending before BIFR.

9. Considered the submissions made by the learned counsel for both the parties and perused the record. Considered the written submissions filed on behalf of parties.

10. From the perusal of the impugned award, it is clear that the Labour Court has drawn an adverse inference for non production of evidence contrary to the claim of the respondent employees that they have worked for 240 days contiuously in a one calendar year, in order to arrive to a conclusion that the respondent employees have worked for 240 days in one calendar year, and therefore, held that they all are permanent employees, despite, no evidence to this effect has been brought on record by the respondent employees. The said approach is not a correct approach as it is for the claimants to lead evidence to this effect.

11. In this regard, paragraphs nos.16, 17 and 18 of the judgment of the Hon'ble Supreme Court rendered in the case of Surendranagar District Panchayat Vs. Dahyabhai Amarsinh, 2005 (8) SCC 750, is apposite:

"16. In Range Forest Officer vs. S.T. Hadimani, (2002) 3 S.C.C. 25 - (SCC at p.26, para 3) ), this Court held that

"In our opinion the Tribunal was not right in placing the onus on the management without first determining on the basis of cogent evidence that the respondent had worked for more than 240 days in the year preceding his termination. It was the case of the claimant that he had so worked but this claim was denied by the appellant. It was then for the claimant to lead evidence to show that he had in fact worked for 240 days in the year preceding his termination. Filing of an affidavit is only his own statement in his favour and that cannot be regarded as sufficient evidence for any court or tribunal to come to the conclusion that a workman had, in fact, worked for 240 days in a year. No proof of receipt of salary or wages for 240 days or order or record of appointment or engagement for this period was produced by the workman. On this ground alone, the award is liable to be set aside."

17. More recently, in Rajasthan State Ganganagar S. Mills Ltd. vs. State of Rajasthan, (2004) 8 S.C.C. 161, Municipal Corpn, Faridabad vs. Siri Niwas, (2004) 8 S.C.C. 195 and M.P. Electricity Board vs. Hariram, (2004) 8 S.C.C. 246, this Court has reiterated the principal that the burden of proof lies on the workman to show that he had worked continuously for 240 days in the preceding one year prior to his alleged retrenchment and it is for the workman to adduce an evidence apart from examining himself to prove the factum of his being in employment of the employer.

18. In the light of the aforesaid, it was necessary for the workman to produce the relevant material to prove that he has actually worked with the employer for not less than 240 days during the period twelve calendar months preceding the date of termination. What we find is that apart from the oral evidence the workman has not produced any evidence to prove the fact that he has worked for 240 days. No proof of receipt of salary or wages or any record or order in that regard was produced; no co-worker was examined; muster roll produced by the employer has not been contradicted. It is improbable that workman who claimed to have worked with the appellant for such a long period would not possess any documentary evidence to prove nature of his engagement and the period of work he had undertaken with his employer. Therefore, we are of the opinion that the workman has failed to discharge his burden that he was in employment for 240 days during the preceding 12 months of the date of termination of his service. The Courts below have wrongly drawn an adverse inference for non production of the record of the workman for ten years. The scope of enquiry before the Labour Court was confined to only 12 months preceding the date of termination to decide the question of continuation of service for the purpose of Section 25F of the Industrial Disputes Act. The workman has never contended that he was regularly employed in the Panchayat for one year to claim the uninterrupted period of service as required under Section 25B(1) of the Act. In the fact & situation and in the light of the law on the subject, we find that the workman-respondent is not entitled for the protection or compliance of Section 25F of the Act before his service was terminated by the employer. As regards non- compliance of Sections 25G and 25H suffice is to say that Witness Vinod Mishra examined by the appellant has stated that no seniority list was maintained by the department of daily wagers. In the absence of regular employment of the workman, the appellant was not expected to maintain seniority list of the employees engaged on daily wages and in the absence of any proof by the respondent regarding existence of the seniority list and his so called seniority no relief could be given to him for non-compliance of provisions of the Act. The courts could have drawn adverse inference against the appellant only when seniority list was proved to be in existence and then not produced before the court. In order to entitle the court to draw inference unfavourable to the party, the court must be satisfied that evidence is in existence and could have be proved."

(emphasis supplied)

12. In the present matter, once there is no material before the labour court to conclusively come to the conclusion that the respondent employees have worked for 240 days in a calendar year to declare the respondent employees to be a permanent employee, still to declare them as permanent employee, in my view it is not a legally accepted approach. Initial burden was upon the workmen to prove their claim by bringing cogent evidence and once they have failed to discharge their initial burden, the Labour Court has erred in accepting the version of the respondent employees and also erred in drawing adverse inference against the petitioner corporation.

13. Judgment rendered in the case of Uttar Pradesh State Sugar Corporation Limited Now Doiwala Sugar Company Limited, Doiwala through its Executive Director Vs. Niraj Kumar & Ors, 2009 (14) SCC 712, Supreme Court has set-aside award passed by the Labour Court on the ground that there was no material from which it can be held that workman has discharged his burden. Relevant paragraphs are 11,12,13 and 14 which are reproduced below:

"11. The question that falls for our consideration is: whether in the facts noticed above, the workman was engaged as a temporary workman for seasonal workman and whether he is entitled to be re-employed in the succeeding year?

12. It is not that the daily-rated employees engaged during the season by the Corporation automatically become seasonal workmen. If an employee is engaged for work of a temporary or casual nature like additional workload during a season, his engagement would be that of a temporary workman.

13. Having perused the award of the Labour Court carefully, we find it difficult to fathom on what basis the Labour Court recorded the finding that the first respondent was engaged as a seasonal workman. The burden lay on the workman to establish that he was engaged as a "seasonal workman". There is no material from which it can be held that the workman has discharged his burden.

14.The High Court brushed aside the objection raised by the Corporation that Respondent 1 was engaged on temporary basis in one line by observing that the counsel of the petitioner has not been able to show any perversity in the finding recorded by the Labour Court. In our view, the finding recorded is based on no legal evidence and the High Court was not justified in affirming the said finding."

(emphasis supplied)

14. The impugned award is legally unsustainable on other grounds also as the Labour Court has not considered the effect of adopting VRS scheme and accepting the settlement amount without any protest. Further, the Labour Court has not considered, whether the demand of Rs.15.51 crores from the State Government by the petitioner, which has not received till date would cover payment of any outstanding amount of respondents or not, whereas it is the stand of petitioner corporation that no dues is outstanding qua to the respondents.

15. In view of the above discussions and observations, I find that the finding returned by the Labour Court while deciding the industrial dispute referred to it are based upon no legal admissible evidence and are wholly perverse and erroneous and as such the award of the learned Labour Court cannot be sustained.

16. Accordingly, the present petition for writ is allowed and the award dated 28.8.2014 passed by the Respondent no.1, is hereby set-aside.

17. No order as to costs.

Order Date :-15.5.2019-SB

(Saurabh Shyam Shamshery,J)