Rashtriya Mill Mazdoor Sangh ... vs Empress Mills, Unit Of ...
2007 Latest Caselaw 725 Bom

JUDGMENT

A.H. Joshi, J.

1. The appellant in both the Appeals is the original applicant who had filed application under Section 78 of the Bombay Industrial Relations Act, 1946, claiming a declaration that the employer, as it then was, namely, Central India Spinning, Weaving and Manufacturing Company Limited has effected certain illegal change.

2. During pendency of the said BIR Application, the Textile Unit was taken over by the State, under the provisions of the Central India Spinning, Weaving and Manufacturing Company Limited, Empress Mills Nagpur (Acquisition and Transfer of Undertakings) Act, 1986 (hereinafter referred to as "the Act"). During pendency of application, present Respondent No. 1 (hereinafter referred to as "the Corporation") filed application for intervention on 25.10.1991.

3. In the application dated 25.10.991, the applicant - Corporation (present Respondent No. 1) averred as follows:

2. That, under the provisions of Nationalization act, the Commissioner of Payments has been appointed to decide the liability of the erstwhile management. That, about 7,000 employees of the erstwhile management have filed claims before the commissioner of Payments, wherein they have, among other things, claimed wages for the period the erstwhile management had declared lockout. That, under Section 25 of the Act, the liability of the erstwhile management in category I, if any, discharged by the Commissioner of Payments, may be assumed by the State Government and the State Government direct the applicant Corporation to take over the liability. It is submitted that considering the limited amount presently available with the Commissioner for disbursement, in case it is held that the employees are entitled to claim wages for the lockout period, such liability may remain undischarged out of the payments made to the Commissioner. That, in such eventuality, this applicant may be called upon as to assume liability in that respect. Thus the applicant has considerable stake in the present proceeding and this applicant may be affected by the outcome of the present proceedings. The applicant, therefore, wants to intervene in the matter and to oppose the application filed by the applicant Union.

4. Considering the facts and circumstances stated above, it would be in the interest of justice to permit this applicant to intervene in the matter and to participate in the proceedings.

Quotation is copied from Page Nos. 61 & 62 of Paper book of LPA No. 7/2007 Based on the above-quoted averments, the Corporation prayed for being impleaded as party in both applications.

The Applications for intervention filed both cases were opposed by Union, on the ground of 'locus standi.' The Labour Court rejected the application by order dated 23.12.1993.

4. The Corporation who was aggrieved by order dated 23.12.1993 rejecting application for intervention preferred Revision Applications, which were registered as Rev. (BIR) Nos.2 and 3 of 1984 before the Industrial Court, Nagpur, which were rejected by the Industrial Court by common order dated 16.11.1994. In the reasoning, the Industrial Court observed as follows:

14. ...If this provision of Section 17 is read together with Section 25, it would be clear that the wages towards illegal lockout and illegal closure even if it would be held as proved by the Labour Court, the liability of the same will not be on the state government or even on the revision applicant as for such claim of wages towards illegal closure and illegal lockout cannot be made before the Commissioner of Payments.

Quotation is copied from Page 90 of the Paper book of LPA No. 7/2007)

5. It seems that after the Industrial Court confirmed the order of rejection of prayer for intervention, the Labour Court proceeded to hear and decide BIR application Nos. 38 and 45 both of 1986 by judgment and order dated 28.2.1995. The Labour Court allowed both the applications ex-parte as the Corporation who was running the Textile Unit had failed to contest these applications.

6. The Corporation filed the Writ Petition Nos. 1842 and 2059 both of 1996, being aggrieved by the judgment and order passed by the Labour Court in BIR Case Nos. 35 and 45 both of 1986.

7. The crucial question agitated in the Petition is relating to need of impleadment and consequent prayer for remand and fresh trial. The petitions were heard and decided finally by judgment and order passed by this Court (single Judge Coram B.P. Dharmadhikari, J.) delivered on 9th October 2007. Learned single Judge allowed the Writ Petition and remanded the cases for hearing and disposal according to law on impleadment of the applicant - writ petitioner, Corporation, as a party. This judgment has aggrieved the present petitioner who, in turn, have filed these Letters Patent Appeals.

8. Parties agree on the point that the question involved in the Writ Petition is as to appreciation of scheme of the Act in question and in particulars Sections 4, 5, 7,12, 17 and Section 25 of the Act.

9. According to Mr. Thakur, the scheme of Section 25 of the Act which contemplates competence on the part of Commissioner of Payments to determine and power of State Government to assume and then if considered necessary direct the corporation to specify the liability, it does not permit or comprehend any possibility of disputing or defending the claim by the Corporation.

10. These very submissions were advanced before learned single Judge. While dealing with those and while dealing with the submissions raised by respondents, learned single Judge held as follows:

...This is also apparent from the fact that Nationalization Act no where prohibits a claimant from establishing his claim before the competent forum like Civil court or Labour court etc. There is no provision which requires discontinuation of his pending proceeding or for transferring such proceeding to commissioner of Payment or for seeking any leave from Commissioner of Payment for their continuation. In these circumstances, it is apparent that the Nationalization act itself permits a claimant to prosecute his remedy before appropriate forum. The said Forum therefore has to follow the procedure which is evolved for it and it cannot be argued that the nationalization act therefore controls such procedure. In fact, in entire Nationalization Act, there is no such provision which contemplates the procedure to be followed by such other forums, including the Labour court or Industrial court.

In the result, learned single Judge held that in absence of a mechanism to adjudicate the liability of the proprietor and in turn the liability which would be fastened to the corporation, the Corporation was entitled to be impleaded and heard.

11. According to learned Advocate for the appellant Mr. S.D. Thakur, 'the Act' is a complete Code in itself as it recognizes the rights of the workmen and creates a mechanism of Commissioner of Payments, and, the Corporation, to whom the acquired undertaking has been transferred, has to simply answer the liability. Based on this, the appellant has raised two crucial grounds, which be read by quoting as follows:

Ground No. (B):

(B) That the learned single Judge ought to have seen and appreciated that by the Nationalization act of 1986, the central India spinning, weaving and Manufacturing Mills Company Limited, "The Empress Mills", Nagpur was nationalized by the state Government by Ordinance dated 3.10.1986 and that the Central India Spinning, Weaving and Manufacturing Mills Co. Ltd., was defined as Proprietor in Section 2(h) of the said Nationalization Act and through an express provision contained in Section 5 of the Nationalization Act every liability of the Mill prior to the appointed day viz., 3.10.1986 shall be the liability of the Proprietors and shall be enforceable against them and not against the state government or against the Maharashtra State Textile Corporation. That this position has further been reiterated in Sub-section (b) of Section 5 and reading of these express provisions ought to have made it clear to the learned single Judge that any claim for the period prior to 3.10.1986 has to be only against the Proprietors and, therefore, the Empress Mills, as a unit of Maharashtra State textile corporation, the respondent No. 1/Original petitioner has no locus standi to participate in the proceedings initiated against the Proprietors" notwithstanding the fact as to whether the Proprietor participated in the proceedings in regard to the claims prior to 3.10.1986.

(C) That the learned Single Judge further ought to have seen and appreciated that in so far as the determination of claims against the Proprietors for the period prior to 3.10.1986 is concerned, the Legislature has deliberately kept the State Government and the Maharashtra State Textile Corporation 'Corporation' for short) outside the purview of such litigation aimed at having the claim of against the Proprietor determined by an appropriate forum. That this being the deliberate scheme of the Nationalization Act, merely because after the determination of the claim and consideration of the same by the Commissioner of Payments if such a liability arising out of the claim so determined is to be assumed by the State Government as contemplated by Section 25 of the Nationalization Act and there is a possibility, as envisaged in Sub-section (2) of Section 25, of the State Government directing the corporation to take over the liability assumed by the Government under Sub-section (1) on receipt of such direction, the learned Single Judge ought to have seen and appreciated that while Sub-section (1) of Section 25 requires the State government to assume the liabilities of the Proprietors which are not discharged fully by the Commissioner, under Sub-section (2) thereof it is optional on the part of the State Government either to discharge such undischarged liability by itself or direct the Corporation to do the same.

Quoted from Page No. 2 and 3 of the Paper book of LPA 07/2007.

12. In oral submissions, learned Advocate Mr. Thakur urged that it is competent on the part of the State Government that such of the claims as would be considered and determined by the Commissioner of Payments which are not fulfilled by the Proprietors will be assumed by the State Government, who may either discharge such liability or direct the Corporation to do the same. Yet according to learned Advocate Mr. Thakur, impleadment of Corporation cannot be done except at the cost of delay and yet being totally unnecessary and hence the order under challenge deserves reversal and restoration of order of Labour Court.

13. Only question involved in this appeal is whether learned single Judge fell in error in accepting the plea that the Corporation was a necessary party.

14. Taking exception to this judgment, Mr. Thakur, urged that the judgments relied upon by learned single Judge are in relation to need of Acquiring body under the Land Acquisition Act and, therefore, do not in any manner govern the issue in question.

15. Appellant takes exception to reliance placed by learned single Judge on the judgments, namely:

(i) U.P. Awas Evam Vikas Parishad v. Gyan Devi (Dead)

(ii) Agricultural Produce market Committee v. N.S.K. Khaja Motihadden Saheb (Dead by LRs) and Ors. .

The ground of objection is that these are the cases under the provisions of Land Acquisition Act. The Acquiring body who was to suffer due to being required to pay enhanced compensation was held to have a right of hearing. According to learned Advocate Mr. Thakur, these judgments are not serving the cause of a precedent on the point in issue.

16. Learned Advocate Mr. Thakur, then, placed reliance on various reported judgments in order to urge that no other meaning and interpretation of the provisions contained in the Act and the scheme as emerges therefrom be drawn as it would go contrary to the legislative intentment. According to Mr.Thakur, learned Advocate, if the statute does not contemplate the Corporation to have any right of defense by impleadment, it cannot be infused by judicial act, which would amount to supplanting the provisions of law and an attempt to fill in a deliberate omission as found in the law. Based on this submission, learned Advocate Mr. Thakur urges that the impleadment of the Corporation is impermissible, apart that it is unwarranted. In order to support his plea, Mr.Thakur has placed reliance on various judgments, as was done before the learned single Judge. The judgments relied upon are as follows:

1) Amit Kumar Shaw and Anr. v. Farida Khatoon ;

2) Devchand Constructions v. Board of Trustees of the Port of Mormugao and Anr. .

3) N.T. Veluswami Thevar v. Raja Nainar and Ors. :

4) Shamrao V. Parulekar v. District Magistrate Thana ;

5) Krishan Gopal v. Shri Prakashchandra and Ors. .;

6) Union of India v. Elphinstone Sipping and Weaving Co. Ltd. And Ors. .

Out of these judgments, Item Nos. 1 and 2 pertain to need and necessity of proper parties; whereas other citations pertain to rules of interpretation of doctrine of 'harmonious interpretation', rules of construction etc.

17. We think that it shall suffice to take brief resume of the citations relied upon by the appellant instead of going in details. If we consider two judgments referred to in para No. 15 and first two judgments referred to in para No. 16 along with the judgment reported in National Textile Workers Union and Ors. v. P.R. Ramakrishnan and Ors. , we find that the test would be whether a person seeking to be impleaded has a right or interest in the subject-matter lis which is being tried. If the answer be in affirmative, such person is a necessary party. On the facts of this case, the Corporation, even according to what has been urged by the appellant, shall be liable to answer the liability which the State Government may direct. The scheme of the Act does not provide for or arrange or machinery for adjudication of the liability of the Corporation towards the workman. The issue would not arise in the event the liability of the Proprietor is already adjudicated by the Courts or Tribunal or authority or forum under Industrial Law or or any other law. The question would remain open when the liability is unsettled and uncrystallized, in such eventuality, it would be hard to conceive that the Corporation would not be entitled to raise any dispute as to the liability that the Corporation would be asked to honour. Considering this eventuality, the Corporation is not just a proper party, but is a necessary party in the proceedings before Tribunal or Labour/Industrial Courts or other forum. If the Corporation is permitted to be impleaded and the orders or awards which may be passed by such forum would essentially and eventually be binding on the Corporation. Looking at the situation from this angle if the Corporation is allowed to be impleaded not just an intervenor but as a party interested, it would not only answer in affirmative the obligation to observe the principles of natural justice but would also make the Corporation liable to answer the liability without any grudge or demur when the liability to be assumed by the State Government is passed on to the Corporation. Such a party i.e. Corporation having not been heard in the matter of adjudication would not in that eventuality, be a ground available in any future lis.

18. Appellant'sarguments that the judgment under Land Acquisition Act cannot govern the issue may sound well. However, if one goes to the root to find out as to what was the cause of permitting the Acquiring body to be impleaded is not because the case was coming under the Land Acquisition Act but ultimate liability on account of enhancement of compensation was going to be fastened to and/or passed on the Acquiring body without its being heard against the ground on which the enhancement is being sought. Thus, Acquiring body has direct interest in the matter was a necessary party. The spirit behind the citations and the real dictum will have to be read. The precedent ought not be discarded because the caution to render it arose as the case came through a particular enactment. The submissions of learned Advocate Mr.Thakur that the judgments rendered under Land Acquisition Act do not govern the issue and no value of precedent is, therefore, liable to be rejected.

19. Learned Advocate Mr. Thakur, however, is not in a position to state as to how the ratio laid down in National Textile Workers Union (supra) requiring even the judicial forum to follow the rule of audi alteram partem has no application to present case.

20. This Court finds that hearing the Corporation who was ultimately be bound to face the claim, had every right and locus standi. If Corporation is present now its grounds of objection would be mellowed down or ruled out. If postponed, those shall crop up after case proceeds before Commissioner of Payments.

21. In this background, impleadment of the Corporation as found by the learned single Judge to be necessary, cannot be faulted.

22. The situation, therefore, leads to only conclusion that for reasons best known to the appellant, it is interested in pursuing the inchoate cause by leaving the lis to remain alive. In this background, nothing except keeping the fate of workmen in suspended animation has been achieved by opposing the payer for impleadment. In this background, we find that there is no merit in the LPAs, the same deserve to be dismissed and are dismissed. We direct the parties to bear their own costs.