The National Bicycle Corporation ... vs Gopal B. Keluskar Since Deceased ...
2002 Latest Caselaw 511 Bom

JUDGMENT

Mhatre, J.

1. This Appeal is directed against the judgment and order of the learned Single Judge upholding the Award of the Industrial Tribunal under which the Respondent workmen were directed to be reinstated by the Appellant with continuity of service and back wages for the period after 15th October 1980 till reinstatement.

2. A few facts which are necessary for the determination of this Appeal are as follows :-

The Respondents were employed with Hind Cycles Limited and worked there for almost twenty years. Their services came to be terminated without any notice or wages in lieu of notice or any retrenchment compensation. Individual disputes were raised by the Respondent workmen which were referred for adjudication before various Labour Courts. The Labour Courts made Awards in these References setting aside the orders of termination as they were void ab initio and in violation of the provisions of Section 25F of the Industrial Disputes Act, 1947. During the pendency of the References, the Hind Cycles Limited and Sen-Raleigh Limited (Nationalisation) Act, 1980 (hereinafter referred to as "Nationalisation Act") was enacted. Two Companies, Hind Cycles Limited and Sen-Raleigh Limited were nationalised and their assets vested in the Appellant from the appointed day i.e. 15th October 1980. Since the Nationalisation Act had come into force before the Awards were made in 1981, the Labour Courts directed the Appellant herein to pay back wages but did not direct reinstatement of the workmen as, according to the Labour Courts, under the Nationalisation Act it was not necessary for the Appellant to take over the services of these workmen. The workmen, therefore, through their Union raised a fresh dispute and a common Reference was made being Reference (IT) No. 40 of 1984 before the Industrial Tribunal. The dispute referred for adjudication is as follows :-

"Whether these workman are entitled to the benefit of employment with, whether fresh or continued and back wages, if any and from what date M/s. National Bicycle Corporation of India Ltd., by virtue of Section 13(i) of Hind Cycles Limited and Sen-Releigh Limited (Nationalisation) Act, 1980. If not what other relief, if any, they are entitled to."

The Appellant contested this Reference and an Award was made on 27th October 1993 directing the Appellant to reinstate the workmen as the termination orders effected by the erstwhile Hind Cycles Limited was void, ab initio. Back wages were directed to be paid to the workmen and the legal representatives of the two deceased workmen, G.G. Walawalkar and G.B. Keluskar.

3. Being aggrieved by this Award, the Appellant has filed a Writ Petition before this Court under Article 226 of the Constitution of India. The learned Single Judge of this Court vide his judgment and order dated 19th April 1994 upheld the Award with the modification that the monetary liabilities pertaining to the back wages for the period prior to 15th October 1980 was required to be claimed from the erstwhile company and not from the Appellant herein. The learned Single Judge upheld the Award of the Tribunal which directed the Appellant to give the workmen the benefit of continued employment and back wages and other benefits for the period commencing from 15th October 1980. It is this judgment which has been impugned in the present Appeal.

4. The main contention raised by the learned Counsel for the Appellant is that, due to the enactment of the Nationalisation Act, the responsibility for any liability incurred due to any action of the erstwhile company i.e. Hind Cycles Limited would be that of the erstwhile company and not of the Appellant. According to the learned Counsel, the first Award of the Labour Court was made after the enactment of the Nationalisation Act and after the appointed day i.e. 15th October 1980 and, therefore, by virtue of Section 5(3) of the said Act, such an Award made after the appointed day could not be enforced against the Central Government or the Government Company i.e. the Appellant. He further submits that the Labour Court in the first Award had held that no liability could be foisted on the Appellant since the Nationalisation Act had come into force and, therefore, had awarded back wages. This issue, according to the learned Counsel, had been decided by the Labour Court and, therefore, the workmen were not entitled to the relief of reinstatement or continued employment with either Hind Cycles Limited or the Appellant. He urges that the Industrial Tribunal therefore could not have taken a different view in Reference (IT) No. 40 of 1984 granting continued employment to the workmen with the Appellant from the date of termination of their services with Hind Cycles Limited. The learned Counsel also faintly submitted that the Appellant was not in a position to defend themselves in the Reference as records of the erstwhile Company Hind Cycles Limited were not available to them.

5. For the proper determination of the issues involved in the present Appeal, it is necessary to set out certain provisions of the Nationalisation Act. Section 5 reads as follows :

"Owners of the two companies to be liable for certain prior liabilities.

5. (1) Every liability, other than the liability specified in sub-section (2), of each of the two companies in respect of any period prior to the appointed day, shall be the liability of the concerned company and shall be enforceable against it and not against the Central Government, or, where the undertakings of the two companies are directed, under section 6, to vest in Government companies, against the concerned Government company.

(2) Any liability arising in respect of materials supplied to either of the two companies after the management of the undertakings of the company had been taken over by the Central Government shall, on and from the appointed day, be the liability of the Central Government or of the concerned Government company aforesaid and shall be discharged by that Government or Government company, as and when repayment for such supplies becomes due and payable.

(3) For the removal of doubts, it is hereby declared that -

(a) save as otherwise expressly provided in this section or in any other provision of this Act, no liability, other than the liability specified in sub-section (2), of either of the two companies 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 the two companies are directed, under section 6, to vest in Government companies, against the concerned Government company;

(b) no award, decree or order of any court, tribunal or other authority in relation to the undertakings of either of the two companies, passed on or after the appointed day, in respect of any matter, claim or dispute, not being a matter, claim or dispute in relation to any matter referred to in sub-section (2), which arose before that day, shall be enforceable against the Central Government, or, where the undertakings of the two companies are directed, under section 6, to vest in Government companies, against the concerned Government company;

(c) no liability incurred by either of the two companies before the appointed day, for the contravention of any provision of law for the time being in force, shall be enforceable against the Central Government, or, where the undertakings of the two companies are directed, under section 6, to vest in Government companies, against the concerned Government company. "

Thus, under Section 5(1), every liability other than that which is specified in sub-section (2) which arose in respect of any period prior to the appointed day is the liability of the concerned company and not enforceable against the Government company or the Central Government. Under sub-section (2), any liability arising in respect of materials supplied to either of the two companies after the appointed day, is the liability of the Central Government or the concerned Government company. Under sub-section (3), for removal of doubts, it is provided that no liability other than that specified in sub-section (2) which arose in respect of the undertakings of the two companies for a period prior to the appointed day would be enforceable against either the Central Government or the Government company. Under sub-section (3)(b), an award, decree or order of any court, tribunal or other authority in relation to the undertakings of either of the two companies, passed on or after the appointed day, in respect of any matter, claim or dispute, not being one relating to materials supplied to the erstwhile companies which arose before the appointed day would be enforceable against the Government company. Sub-section (3)(c) states that no liability incurred by the two companies before the appointed day for the contravention of any provision of law would be enforceable against the Government company.

6. Section 13(1) of the Nationalisation Act relates to continuance of the services of the employees with the Government company after nationalisation. Section 13 reads as follows :-

"Continuance of employees.

13(1) Every person who has been, immediately before the appointed day, employed in any undertaking of either of the companies shall become -

(a) on and from the appointed day, an employee of the Central Government, and

(b) where the undertakings of the two companies are directed, under sub-section (1) of section 6, to vest in Government companies, an employee of the concerned Government company on and from the date of such vesting or transfer, and shall hold office or service under the Central Government or the concerned Government company, as the case may be, with the same rights and privileges as to pension, gratuity and other matters as would have been admissible to him if there had been no such vesting and shall continue to do so unless and until his employment under the Central Government or the concerned Government company, as the case may be, is duly terminated or until his remuneration and other conditions of service are duly altered by the Central Government or the concerned Government company, as the case may be.

(2) Notwithstanding anything contained in the Industrial Disputes Act, 1947, or in any other law for the time being in force, the transfer of the services of any officer or other person employed in any undertaking of either of the two companies, to the Central Government or a Government company, shall not entitle such officer or other employee to any compensation under this Act or any other law for the time being in force and no such claim shall be entertained by any court, tribunal or other authority."

Thus, under this Section, all employees who were on the rolls of the company prior to the appointed day would continue in employment with the same rights and privileges as to pension, gratuity and other matters as were available to the employees prior to the nationalisation. Transfer of the services of the employee from the erstwhile company to the Government company would not entitle him to any compensation.

7. In the present case, the services of Respondent Nos. 1, 2, 4, 5 and 6 were terminated on 21st October 1975 while the service of Respondent No.3 was terminated on 31st August 1977. The Tribunal as also the Labour Courts in the earlier Awards have in unequivocal terms held that the termination of service was void ab initio and non-est as the provisions of Section 25F of the Industrial Disputes Act, 1947 had not been complied with. This being so, the workmen are deemed to have been in service all throughout without any impediment or break in service at all. In fact, the Apex Court in the case Mohanlal v. Management of Bharat Electronics Ltd. (1981) Lab. I.C. 806 held that where there is non-compliance of Section 25F the Labour Court or Industrial Tribunal is required to merely give a declaration that the workman continues to be in service and there has been no termination of service in the eyes of law. Therefore, on the appointed day, i.e. on 15th October 1980, these workers would be deemed to be in service as their termination is void ab initio and non-est. By virtue of Section 13(1), these workmen would be continued in employment of the Appellant as they would be deemed to have been on the rolls of the company on the appointed day. Section 5(3) does not create any obstacle for the Respondent workmen to be continued in service. It is true that the first Awards of the Labour Courts in respect of the workmen was made after the appointed day i.e. after 15th October 1980. However, the Labour Courts having held that the termination is non-est, reinstatement of these workmen cannot be considered as a liability as held by the Apex Court in the case of Workmen concerned, represented by The Bihar Colliery Kamgar Union v. Bharat Coking Coal Ltd. and Ors., 1978 (2) LLJ 17. In the case before the Apex Court, the correct interpretation of Section 9 of the Coking Coal Mines Nationalisation Act, 1972 read along with Section 17 was laid down. Section 9 of the Coking Coal Mines Nationalisation Act, 1972 is similar to Section 5 of the Nationalisation Act. Section 17 of the Coking Coal Mines Nationalisation Act, 1972 is pari materia similar to Section 13 of the Nationalisation Act. The Apex Court (vide paragraph 7) held thus : "7. Section 9 deals with the topic of prior liabilities of the previous owner. Section 9(1) speaks of "every liability of the owner .... prior to the appointed day, shall be the liability of such owner ..... and shall be enforceable against him and not against the Central Government or the Government company."

The inference is irresistible that S. 9(1) has nothing to do with wrongful dismissals and awards for reinstatement. Employees are not a liability (as yet in our country).

Section 9(1) deals with pecuniary and other liabilities and has nothing to do with workmen. If at all it has been anything to do with workmen it is regarding arrears of wages or other contractual, statutory or tortious liabilities. Section 9(2) operates only in the area of S. 9(1) and that is why it starts of by saying "for the removal of doubts it is hereby declared .......".

So, S. 9(2) seeks only to remove doubts in the area covered by S. 9(1) and does not deal with any other topic or subject matter. Section 9(2)(b) when it refers to "awards" goes along with the words "awards" goes along with the words "decrees", or "order". By the canon of construction of noscitur a sociis the expression "award must have a restricted meaning. Moreover, its scope is delimited by S. 9(1). If back wages before the appointed day have been awarded or other sums, accrued prior to nationalisation, have been directed to be paid to any workmen by the new owner, S. 9(2)(b) makes such claims non-enforceable. We do not see any reason to hold that S. 9(2)(b) nullifies S. 17(1) or has a larger operation than S. 9(1). We are clear that the whole provision confers immunity against liability, not a right to jettison workmen under the employ of the previous owner in the eye of law."

Therefore, similarly in the present case, at best the wages of the workmen pre-nationalisation would be payable by the erstwhile company. However, the Appellant would be liable to continue the workmen in service and pay back wages.

8. The next submission of Mr. Sawant, learned Counsel appearing for the Appellant, regarding principles analogous to res judicata being applicable to the Award of the Industrial Tribunal is devoid of any substance. The first Reference made in 1975 was between Hind Cycles Limited and the individual workman. The Labour Courts while making the Awards were circumscribed by the dispute referred to them and have held in those References that reinstatement was not possible in view of the Nationalisation Act although the termination of service was non-est. The Labour Court was not required to consider the question as to whether reinstatement would be with Hind Cycles Limited or the present Appellant in that Reference. However, to obviate any difficulties, the workmen raised a fresh dispute which was referred for adjudication on 11th June 1984 to the Industrial Tribunal. The dispute referred was worded differently as set out hereinabove. This dispute was raised on the present Appellant and, therefore, it could not be said that the Awards of the Labour Court or its findings that reinstatement with the Appellant could not be given can be considered as res judicata of principles analogous to res judicata. Therefore, in our view, this contention of the learned Counsel cannot be accepted.

9. While considering the liability of the National Textile Corporation under the Textile Undertakings (Taking Over of Management) Act, 1983, this Court in the case of National Textile Corporation (South Maharashtra) Ltd. v. Shramik Janata Union and Ors., 1990 Mh. L.J. 1315, was similarly concerned with the provisions of Section 3(7) of that Act. The Division Bench held that as there was no termination of service of the workmen in the eyes of law, reinstatement is not a liability which had accrued prior to the appointed day. In fact, reinstatement is not a liability at all as considered by the Apex Court in The Bharat Coking (supra). The Appellant, therefore, would be liable to reinstate the Respondent workmen with continuity of service and full back wages. Section 5(3) would be of no assistance to the Appellant to defeat the claim of the workmen. Mr. Sawant, learned Counsel for the Appellant, then made a feeble attempt to urge that it was not possible for the Appellant to rebut the case of the workman before the Industrial Tribunal as the Appellant did not possess the record of their services with Hind Cycles Limited. This submission cannot be accepted as under the Nationalisation Act all books, registers and records were taken over by the Appellant.

10. In the present case, Respondent Nos. 1, 2 and 6 have expired and their legal heirs have been brought on record. Respondent Nos. 3 to 5 are well past their age of retirement. Therefore, the Appellant shall pay to Respondent Nos. 3, 4 and 5 wages upto their date of retirement from 15th October 1980 i.e. the appointed day together with all consequential benefits. The legal heirs of Respondent Nos. 1, 2 and 6 shall be paid wages and consequential benefits upto the date of death of these Respondents or the date of retirement whichever is earlier.

11. Appeal dismissed with costs.

12. Issuance of certified copy expedited.