Bombay High Court
N.T.C.(S.M.) Ltd vs Kamala Singh & Ors on 23 June, 2017
Bench: A.S. Oka
appeal_1118_2001.doc
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
ORDINARY ORIGINAL CIVIL JURISDICTION
APPEAL NO.1118 OF 2001
IN
WRIT PETITION NO.806 OF 1997
N.T.C.(S.M.) Ltd. ...Appellant
Versus
1) Kamla Singh and Ors. ...Respondents
.....
Ms Meena H. Doshi for the Appellant.
Mr. Ashok Shetty a/w. Mr. Swapnil Kamble i/b. Mr. N.M.
Ganguli for the Respondent Nos.1 & 3 to 7.
CORAM : A.S. OKA &
SMT. ANUJA PRABHUDESSAI, JJ.
JUDGMENT RESERVED ON : 16th DECEMBER, 2016.
JUDGMENT PRONOUNCED ON : 23rd JUNE, 2017.
Judgment (Per Smt. Anuja Prabhudessai, J.):-
The Appellant /original Petitioner has challenged the order
dated 26th June, 2011 whereby the learned Single Judge of this Court
dismissed the Writ Petition No.973 of 2015. The challenge in the said
writ petition was to the order dated 4.4.1997 whereby the Industrial
Tribunal had directed the Appellant to refrain from engaging in unfair
labour practices under Item Nos.5 and 9 of schedule IV of Maharashtra
Recognition of Trade Unions and Prevention of Unfair Labour Practices
Act, 1971 (hereinafter referred to as 'MRTU and PULP Act') and further
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ordered to give benefits of 4th Pay Commission to the complainants
/Respondent Nos.1 to 7 herein.
2. The Respondent Nos.1 to 7 were working with various
textile mills and were governed by the Industrial settlements entered
into between the recognized Union and the Mill owners' Association.
The said textile mills were acquired and vested in the National Textile
Corporation (NTC) the Appellant herein, under the provisions of the
Sick Textile undertaking (Nationalisation Act) 1974. Accordingly, the
services of the Respondent Nos.1 to 7 came to be transferred to the
National Textile Corporation (NTC) and the Respondent Nos. 1 to 7
thus became the employees of NTC, the Appellant hereinabove.
3. Pursuant to the directions given by the Apex Court in Jute
Corporation Of India vs Jute Corporation Of India Ltd. And
reported in 1990 SCC (3) 436 on the pattern of wage fixation of the
employees of public sector corporation and the consequent Office
Memorandum dated 12th June, 1990, issued by the Central
Government, the Appellant placed the Respondent Nos.1-7 in NTC
Scales, which were equivalent to what was admissible under the
recommendation of 3rd Central Pay Commission (CDA Pattern). These
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Scales were subject to revision based on the Industrial D. A. Pattern
with effect from the date of placement under NTC Scale. By
subsequent order issued upon finalization of the IDA Pattern, the
Appellant notified the revised pay structure with effect from 1st
January,1991 extending benefits of the Industrial Dearness
Scheme. The Respondent Nos. 1 to 7 were not given benefits of a wage
revision on the basis of the recommendation of the 4th Pay Commission
as according to the Appellant such benefits were admissible only to
those employees who were granted NTC pay scale prior to 1.1.1991.
4. The Respondent Nos.1 to 7 therefore filed a complaint
before the Industrial Tribunal alleging unfair labour practice under
Items 5 and 9 of Schedule IV of the Maharashtra Recognition of Trade
Unions and Prevention of Unfair Labour Practices Act, 1971 in short,
the MRTU and PULP Act. The grievance of the Respondents was that
the Appellant had done the wage fixation in such a manner as to
reduce their provident fund contribution. These Respondents claimed
that the reduction of Provident Fund contribution was in contravention
of section 12 of the Employee Provident Fund and Miscellaneous
Provisions Act, 1952 (hereinafter referred to as 'EPF and MP Act') and
the same amounts to unfair labour practice under item 9 of Schedule IV
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of the Act.
5. The Respondent Nos.1 to 7 further claimed that despite
being in service much prior to 1989, they were not extended the
benefits of pay revision under the recommendation of 4th Pay
Commission, while such benefits were extended to some other
workmen of the Appellant. The Respondent Nos.1 to 7 alleged that the
Appellant had resorted to hostile discrimination by showing favouritism
and partiality to one set of workmen and thus indulged in unfair labour
practice within the meaning of item no.5 of the Schedule IV to the
MRTU and PULP Act.
6. The Appellants contended that the respondents had
accepted NTC Scales in place of Mill Grade, to which they were entitled
to pre- nationalization without demur. The contention of the Appellant
is that the workmen who were extended NTC scales prior to
31.12.1998 were eligible for dearness allowance as applicable to the
Central Government Employees whereas the employees placed under
NTC scale on and after 1.1.1989 were entitled only to the industrial
dearness allowance as applicable to the public sector enterprises. The
Appellant stated that the Respondent Nos.1 to 7 were not eligible to
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the benefit of DA as recommended by the 4th Pay Commission since
they were placed on NTC scale on or after 1.1.1989. The appellants
have also denied that there was any hostile discrimination between the
employees or that they had shown favouritism to one set of the
employees. In short, the Appellant denied having committed unfair
labour practice within the meaning of Items 5 and 9 of Schedule IV of
the MRTU & PULP Act, 1971.
7. The Appellant further claimed that while switching over
from Mill Grade to NTC grade, totality of emoluments and benefits
were taken into consideration. The workmen were placed on NTC
Grade in such a manner that their emoluments and other benefits in
totality were more than those obtained prior to the switch over. The
Appellant stated that unlike Mill Grade employees, the employees who
are extended NTC scale are eligible for periodical revision of terms and
conditions of service. The Appellants have denied violating provisions
of Provident Fund Act and having engaged in unfair labour practice
under Items No.5 and 9 of Schedule IV of the Act.
8. The Appellant as well as the Respondents adduced evidence
before the Industrial Court. The Industrial Court, by Order dated 4 th
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April, 1997 held that the Appellant had reduced the Provident Fund
Contribution of the Respondent Nos.1 to 7 at the time of revision of
grades and had thereby violated the provisions of Section 12 of the EPF
and MP Act. The Industrial Court further held that though the
Respondents were appointed prior to January 1989, they were denied
the benefits of the revision under the 4th Pay Commission
recommendation on the basis of the date of placement in NTC Scale
while similar benefit was extended to the other set of employees who
were placed on NTC pay scale prior to 1.1.1989. The learned Judge
held that the Appellant has committed unfair labour practice by
discriminating amongst the employees. The Industrial Court therefore
held that the Appellant has committed unfair labour practice under
items Nos. 5 and 9 of Schedule IV of the MRTU and PULP Act and
directed the Appellant to give to the Respondent Nos.1 to 7 the benefits
of wage revision under 4th Pay Commission.
9. The Appellant challenged this Order in Writ Petition No.
806 of 1997, which was dismissed by the learned Single Judge of this
Court, by Order dated 26th February, 2011. The learned Single Judge
observed that while issuing the directions in Jute Corporation of
India Officers' Association (supra) the Apex Court has held that the
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scales of pay and Dearness Allowance recommended by the report of
the High Power Pay Committee will be extended to those employees
who have been appointed with specific terms and conditions for the
grant of Central Dearness Allowance. The Pay Scales and Dearness
Allowance recommended by the High Power Pay Committee would
similarly to be applied to those employees who were being paid the
Central Dearness Allowance under the applicable rules laid down by
the public sector enterprises. The learned single judge further observed
that Supreme Court, however, directed that those employees who were
appointed on or after 1-1-1989 would be governed by the Pay Scales
and allowances as may be decided by the Government in its discretion.
Employees appointed earlier on the Industrial Dearness Allowance or
I.D.A. pattern were to continue to be governed by the terms of
conditions of their appointment. The learned single judge held that the
date of appointment would mean the date of initial appointment and
the same cannot be equated with the date on which the employee was
placed on NTC pay scale as sought to be contended by the Appellant
and that in fact, it was not permissible to introduce such qualification.
10. The learned Single Judge held that the Respondent Nos. 1
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to 7 having been appointed much prior to 1.1.1989 were entitled for
benefits as recommended by the 4th Pay Commission. It was further
held that pre-nationalisation workmen whose services were taken over
by NTC constitute one homogeneous group and it was not open to the
Appellant to segregate this homogeneous group into two separate
categories based upon the date on which they were granted NTC Grade
pay scale. It was held that to deny the benefit of 4th Pay Commission,
which were granted to the other employees, was a discrimination
otherwise than on merit and was based on extraneous consideration
namely on whether the employee had been placed on NTC Grade pay
scale after 1.1.1989.
11. The learned Single Judge also endorsed the finding of the
Industrial Court that the Provident Fund contribution was reduced
without bringing the said issue to the notice of the workmen. The
learned single judge therefore held that the Industrial Court was
entirely justified in holding that there was a breach of provisions of in
terms of 5 and 9 of schedule IV of MRTU and PULP Act and accordingly
dismissed the writ petition. This order has been assailed in the present
Appeal.
Megha/pps 8/25
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12. After having heard the respective parties, another Division
Bench of this Court by judgment and order dated 2.11.2007 had
dismissed the present Appeal. The said order was challenged in SLP
No. 1839 of 2008, which was disposed of by order dated 8.4,2008. A
perusal of the said order reveals that the Respondent Nos.1 to 7 had
stated before the Apex Court that they had no grievance with regard to
their claim for being given CDA and IDA grades and that the only
dispute was with regard to the wages to be fitted at the time of their
induction in the NTC Grade taking into consideration the provisions of
section 12 of the EPF & MP Act. The Apex Court observed that the
division bench of this court had not dealt with the issue with regard to
the fitment in a particular scale of pay more particularly in the
background of the additional affidavit filed by Mr. Premanand
Wamanrao Waghmre, Deputy General Manager (Personnel). The Apex
Court therefore set aside the order dated 2.11.2007 and remitted the
matter for reconsideration keeping in view the changed scenario and
the additional affidavit referred to above and other material which the
parties may wish to put on record.
13. Pursuant to the order dated 8.4.2009 in SLP 1839 of 2008
the matter came up for hearing before another Division Bench of this
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Court. After having heard the parties, the Division Bench of this Court
by judgment dated 25.3.2010 set aside the order of the Industrial
Court as well as the order of the learned Single Judge and remitted the
matter to the Industrial Court for de novo consideration and decision
in accordance with law and in the light of the previous orders passed in
this proceedings and also the orders passed by the Apex Court. The
said order was challenged by the Respondent Nos. 1 to 7 in Civil
Appeal No.2228 of 2012. The Apex Court by order dated 21.2.2012
set aside the said impugned order of remand and remitted the matter
to this Court for being heard and decided taking into consideration the
order dated 8.4.2009 in SLP No. 1839 of 2008 as well as order dated
10.2.2010 passed by the Division Bench of this Court and also the
affidavit of Mr. Premanand Wamanrao Waghmare, Deputy General
Manager (Personnel).
14. Heard the learned Counsels for the respective parties. Ms
Doshi, the learned counsel for the Appellant has submitted that mere
reduction in quantum of Provident Fund contribution does not amount
to breach of section 12 of the EPF and MP Act. She has submitted that
the reduction in the quantum of Provident Fund contribution was
marginal. She contends that the said reduction was a consequence of
Megha/pps 10/25
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shifting the employees from Mill Grade to NTC grade based upon DPC
recommendations. She contends that the Respondents 1-7 had not
challenged the recommendations and on the contrary accepted the
NTC pay scale without protest or demur.
15. Referring to the affidavit of Wamanrao Waghmare as well
as the chart which is placed on record, the learned counsel for the
Appellants submitted that the Appellant has made good the shortfall as
per the order of this Court. Furthermore, there has been no shortfall in
Provident Fund contribution after the revisions granted to the
Respondent Nos.1 to 7 in 1992 and 1997 in IDA pay scale.
16. Mr. Shetty, the learned counsel for the Respondent Nos.1 to
7 has submitted that since Provident Fund contribution is based on
Basic pay and DA, the same was required to be protected while fixing
the pay in the NTC Scale. He has further submitted that the Appellant
did not protect the Basic pay and the same resulted in reduction of
Provident Fund contribution, which is in violation of section 12 of the
EPF and MP Act. He has relied upon decisions of the Apex Court in
Chief Conservator of Forests and Anr. Vs. Jagannath Maruti
Kondhare & Ors. (1996) 2 SCC 293, State of M.P. & Ors. Vs. Dr.
Megha/pps 11/25
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Yashwant Trimbak (1996) 2 SCC 305, Som Prakash Rekhi Vs. Union
of India and Anr. (1981) 1 SCC 449, decision of this Court in
Consolidated Crop Protection Pvt. Ltd. Vs. V. Hema Chandra Rao
(Petition No.1654 of 1975 dated 6th February, 1976) and decisions
of Kanataka High Court in Regional P.F. Commissioner, Bangalore Vs.
Harihar Polyfibres (W.A. No.266/1990, dated July 30, 1991) and
Jasmine Amarjothi Vs. Union of India and Ors.
17. Mr. Shetty the learned counsel for the Respondent Nos.1 to
7 has further submitted that the statement that the Appellant has
deposited the Provident Fund contribution as per the order of the
Court and that thereby has made good the shortfall in the PF is
misleading. He has submitted that the percentage of Provident Fund
contribution deducted from the wages of the employees was more than
12% and that the said amount which was deducted has been paid as
the Provident Fund. He has further submitted that the revision of pay
and the consequent increase in the quantum of Provident Fund
contribution is not relevant to decide the controversy of pay fixation.
18. We have heard the learned counsel for the Appellant as well
as the Respondent Nos.1 to 7. We have also perused the records
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including the affidavits/counter affidavits filed by the respective
parties. In the light of the statement made by the Respondent Nos. 1 to
7 before the Apex Court and having given up the grievance in respect
of wage revision as per the recommendation of 4th pay commission,
and the resultant allegation of unfair labour practice under item 5, the
findings recorded in the impugned judgment on the said issue cannot
be sustained. The only issue, which remains for determination is with
regard to the wage fixation of the Respondent Nos. 1 to 7 at the time of
their induction in NTC Scale, taking into consideration the provisions
of section 12 of EPF & MP Act.
19. The grievance of the Respondent Nos.1 to 7, as highlighted
in the complaint and substantiated before the Tribunal, is that the
Appellant had carried out the wage fixation in such a manner as to
reduce the Provident Fund contribution in respect of each of the
employees. The Respondents have contended that such reduction of
the provident fund contribution was not permissible under section 12
of the EPF and MP Act.
20. It may be mentioned here that the EPF and MP Act is a
welfare legislation, enacted with the main objective of protecting the
interest of the employees after their retirement and the interest of the
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dependents after the death of the employees. Section 6 of the EPF and
MP Act sets out the contribution which the employer is obliged to make
towards the provident fund whereas. Section 12 of EPF & MP Act acts
as a protective safeguard. This section imposes a total embargo on the
employer on reducing, either directly or indirectly, the wages of any
employee, as well as the benefits in the nature of old age pension,
gratuity, provident fund or life insurance to which the employee is
entitled under the terms of his employment, for avoiding his liability to
pay contributions under the E.P.F. Scheme.
21. Now coming to the facts of the present case, it is not in
dispute that under the provision of Nationalisation Act the services of
the Respondent Nos.1 to 7 were transferred to the Appellant
Corporation. In lieu of Mill Grade, the Respondents were provisionally
fitted in NTC (CDA) Grade w.e.f.1.7.1990 and thereafter on the basis of
recommendation of DPC, they were granted NTC (IDA) Grade w.e.f.
1.7.1990. The Respondents have produced statements, which give
details of the pay scale viz. Basic, DA, HRA, etc. as well as the quantum
of the Provident Fund contribution under Mill Grade Scale, vis-à-vis
Basic, DA, HRA, etc. as well as the quantum of the Provident Fund
contribution under NTC (CDA ) Grade and NTC (IDA) Grade. A plain
Megha/pps 14/25
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perusal of the statements, correctness of which is not disputed, clearly
indicate that at the time of placing the Respondents in NTC (CDA) pay
Scale, the Basic and DA as well as the PF contribution had been
reduced. Subsequently, at the time of placing the Respondents in
NTC(IDA) scale, the DA was merged in basic. As a result, the basic was
increased, but DA was reduced. Furthermore, the sum total of basic
plus DA paid under NTC(IDA) scale was less than the total amount
paid under these two components in Mill Grade. As a consequence
thereof, the Provident Fund contribution under NTC(IDA) Scale was
less than the Provident Fund contribution under Mill Grade. This is
evident from comparative analysis of the salary details as per Mill
Grade Scale, NTC(CDA) and NTC (IDA) scale. For instance, the salary
details of the Respondent No.1 are as under:
Kamla Singh
Particulars Mill Grade Salary as III Pay (NTC) Grade Salary Jan.91 IDA
on 1-7-1990 Salary as on 1-7- Pay Scale as on 1-7-
1990 1990
Basic Pay 695 620 1835
DA 1788.35 1453.9 361.75
Bombay All. 32.5 62 -
Adhoc 143 122 121.6
HRA 65 450 550.5
Conveyance All. 25 -- -
Gross Total 2748.85 2760.7 2968.85
Megha/pps 15/25
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22. The aforesaid statement reveals that the sum total of Basic
and DA payable to Respondent No.1 as well as his PF contribution in
(NTC)IDA scale was less than that under Mill Grade. Similar was the
case with the other Respondents. It is thus evident that at the time of
switch over from Mill grade to NTC (IDA) Scale there was increase in
Basic Salary as well as total wage packet. However, the total amount
payable to the Respondents under the components of Basic and DA was
reduced resulting in consequent reduction of Provident Fund
contribution. The question would therefore be whether this reduction
was for avoiding the liability.
23. It is to be noted that the appellant has alleged that the NTC
Scales were offered to the employees who were considered meritorious
by the DPC. Needless to state that generally, the wage revision or
promotion leads to an increase in the basic salary. In the instant case,
the basic salary was increased by merging DA. However, as stated
earlier, the total amount received by the Respondents under these two
components viz. and Basic and DA was less than the amount payable
under the said components in Mill Grade. Since the basic pay and the
DA are the components, which determine the quantum of PF
contribution, reduction of sum total of Basic and DA has resulted in
Megha/pps 16/25
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reduction of provident fund contribution. The appellant has not
offered any explanation for fixing the emoluments in such a manner as
to reduce the sum total of Basic and DA payable to them after
promotion and wage revision under NTC (IDA) Grade as compared to
the sum total of Basic and DA which was paid to them under Mill
Grade scale. This leads to an inference that the wage fixation was
done in such a manner as to reduce the contribution of PF, which is in
contravention of the provision u/sec. 12 of the EPF and MP Act, 1952.
24. The contention of the Appellant that in view of the increase
in total emoluments it was not required to protect each and every
component has no merit. As stated earlier, the increase in Basic was
due to merger of Basic and DA. Further the increase in total
emolument was also due to increase in HRA and CCA. It is not in
dispute that Basic wages as defined under section 2(b) of EPF and MP
Act does not include components such as HRA and CCA and these
components are not relevant for computing provident fund or other
pensionary /retirement benefits. Hence, the increase in HRA and CCA
does not in any manner protect and enhance the Provident Fund
contribution or other pensionary benefits. Whereas reducing the Basic
Salary and DA adversely affects the provident fund contribution and
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pensionary benefits, which is prohibited under section 12 of EPF and
MP Act. Suffice it to state that it is not permissible to circumvent the
provision of section 12 of the EPF and MP Act and defeat the object of
the beneficial legislation by increasing those components, which are
not included in computation of provident fund contribution or
pensionary benefit.
25. Now coming to the affidavit of Shri Premanand Wamanrao
Waghmare, he has stated that the Appellant has deposited the
Provident Fund contribution of the Respondents before the PF
authorities. Since the said Provident Fund contribution has already
been paid, the shortfall if any, has been made good. He has further
stated that in the year 1995 and 1997 IDA pattern were revised and
the arrears in respect of these two revisions were calculated and paid
to all the employees on IDA pattern of scales. It is submitted that by
virtue of contribution deposited with the Provident Fund authorities
under the order of the Court and subsequent revision made
retrospectively, there is no shortfall in the PF amount and hence the
Appellant cannot be said to have committed any unfair labour practice
on the said count.
Megha/pps 18/25
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26. The Respondent No.6 has filed his counter affidavit wherein
he has stated that the Appellant had deposited Provident Fund
contribution only after filing of the contempt proceedings for
nonpayment of Provident Fund amount as ordered by this Court. The
Respondent No.6 has stated that for the purpose of Provident Fund
what is relevant is the Basic pay and DA and not the gross emoluments.
He has stated that the Appellant has deposited the difference in PF
contribution without revising the proportionate Basic Pay and
corresponding DA and that the same has resulted in perpetual loss of
Basic Pay and DA with every revision of pay scale.
27. Shri Ashok Vyas, another Deputy General Manager of the
Appellant has filed his affidavit in rejoinder wherein he has stated that
initially, since the pay scales were not defined, the Respondent Nos. 1
to 7 were provisionally placed in the IDA pay scale. Subsequently,
based on the recommendation of the DPC, the Respondent Nos.1 to 7
were granted IDA pay scale which were revised in the year 1992. He
has stated that the Respondent Nos.1 to 7 had not challenged the
recommendation of DPC and as such cannot level allegations of
malafide. He has stated that the Respondent Nos.1 to 7 have received
revision in the IDA scale retrospectively from the date of placement.
Megha/pps 19/25
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He has stated that the Respondent Nos.1 to 7 had accepted said office
order without any protest or demure. A specific condition was
stipulated that they would be bound by new service conditions
associated with NTC pay scale in lieu of those covering Mill Grade in
which they were working prior to such pay scale. He has further stated
that the short fall in the provident fund for the period 1990/1991 upto
1997 has been deposited by the Appellant and there has been no
shortfall at all from the year 1997. He has further denied that there
has been any downward revision of pay scale as alleged.
28. It is in not in dispute at the time of admission of the
petition, the learned single judge of this court by order dated
20.6.1997 had made the following order operative till disposal of the
writ petition. "The Petitioner shall continue to deposit the provident
fund contribution without any reduction and held to be so by the
Industrial Court in the impugned order every month". The said order
was confirmed by the Division Bench by order dated 21.10.1997. The
affidavit filed by the Officers of the Appellant Corporation indicates
that in compliance with the said directions, the Appellant has
deposited before the Provident Fund authorities the shortfall in
Provident Fund contribution amount for the period 1990/1991 upto
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1997. In this regard it is pertinent to note that the averments in the
complaint vis-à-vis the evidence adduced by the Respondents clearly
indicates that the grievance of the Respondent Nos.1 to 7 was not
about simplicitor reduction of Provident Fund contribution. The main
grievance was about initial wage fixation in NTC (CDA) and (IDA)
Grade. The reduction of PF contribution was the consequence of
anomaly in wage fixation i.e. reduction in sum total of Basic and
Dearness Allowance. The Appellant has admittedly not rectified this
anomaly, which had resulted in reduction of Provident Fund
contribution. Failure to protect the Provident Fund at the initial stage
would perpetually impact all further pay revisions and the pensionery
benefits. Hence, mere deposit of the difference in the Provident Fund
contribution or payment of revised scales, without actually addressing
the issue of initial wage fixation, would not absolve the Appellant of
the charges of violation of provisions of sections 12 of the Act.
29. As regards challenge to the decision of DPC to place the
Respondents in NTC (IDA) Scale, as held by the learned Single Judge
the Respondent Nos. 1 to 7 were not fully appraised of the facts as to
enable them to take a conscious decision to opt for a certain pattern of
wage fixation. In fact, they were not given any other option at the
Megha/pps 21/25
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time of initial fitment in the NTC Grade other than reverting to Mill
Grade, as it had been suggested in the cross examination. It is also to
be noted that Shri N.T. Nair who has deposed on behalf of the
Appellant has specifically admitted that he was aware of the fact that
there would be reduction in EPF contribution but the same was not
brought to the notice of the workmen. Furthermore, Shri P.W.
Waghmare has also admitted in his evidence that he too did not know
the implications of the pay fixed in respect of the Respondent Nos.1 to
7. He has stated that he came to know about the reduction in the
contribution of the Provident Fund only when the employee
approached the Court. In such circumstances, it is not open for the
Appellant to contend that the Respondent Nos.1 to 7 had accepted the
grant of NTC Pay scale without protest and demur.
30. To sum up, the Respondents have proved that the wage
fixation under NTC (CDA) as well as NTC(IDA) Grade has resulted in
reduction in P.F. Contribution and the same is in violation of Section 12
of the E.P.F. And M.P. Act. Mere contravention of provision under
section 12 of the E.P.F. and M.P. Act will not per se amount to unfair
labour practice under Item 5 of Schedule IV of the M.R.T.U. and P.U.L.P.
Act. Though the Respondents have put forth a case of discrimination by
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claiming that 115 other workmen have been fitted in revised pay
scales, as to protect their provident fund, there are no averments nor
evidence to prove discrimination on this aspect, as to constitute unfair
labour practice under Item 5 of Schedule IV of the MRTU and PULP
Act.
31. The question which now remains to be answered is whether
reduction in Provident Fund contribution in violation of section 12 of
the EPF and MP Act constitutes unfair labour practice under Item No.9
of Schedule IV of the MRTU and PULP Act. Under Item No.9 failure of
the employer to implement award, settlement or agreement is an unfair
labour practice. The Division Bench of this Court in Kamani Tubes Vs/
Kamini Employees Union and Ors. (1987) 89 BOMLR 417 has held
as under :
5. Item 9 makes the employers "failure to implement award,
settlement or agreement' an unfair labour practice. When an
employer does not implement an award, settlement or agreement
he fails to implement the award, settlement or agreement. There is
then a failure on the part of the employer to implement an award,
settlement or agreement and he is guilty of the unfair labour
practice set out in Item 9. The phraseology of Item 9 affords no
scope for the taking into account of motive or reason or cause for
the failure. To read Item 9 in any manner other than as set out
above would be to do violence to its language. To read Item 9 as
suggesting that there would be no failure if there was inability to
implement would be to read into it the words "without good
cause", and that would be impermissible.
32. Similarly, a Single Judge of this Court in Thane
Municipal Transport, ... vs The Employees Union, T.M.T.C.
Megha/pps 23/25
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(2005) 107 BOMLR 623 after considering the decision in S.G.
Chemicals and Dyes Trading Employees' Union Vs. S.G. Chemicals
and Dyes Trading Limited and Anr, (1936) 2 SCC 624 has held as
under :
"15. It is trite law that an unfair labour practice is committed under
Item 9 of Schedule IV of the MRTU & PULP Act when there is a
breach of provisions of law which impliedly become part of the
contract of service or when an Agreement) Settlement or Award
was not implemented. In S.G. Chemicals (supra), the Apex Court
was considering a case where the management had closed down the
Marketing Division of the Company without complying with Section
25-0 of the Industrial Disputes Act, 1947. A Complaint was filed
under Item 9 of Schedule IV complaining of a breach of Section 25-
0. The Apex Court while over-ruling the judgment of this Court in
the case of Maharashtra General Kamgar Union v. Glass Containers
Pvt. Ltd., (1983) 1 Lab. LJ 326 has held that it was an implied
condition of every agreement, including a settlement, that parties
thereto would act in conformity with law. Such a provision,
according to the Apex Court, was not required to be expressly stated
in any contract in force. The Apex Court observed that if services of
a workman are terminated in violation of any provisions of
the Industrial Disputes Act, such a termination, was unlawful and
ineffective and that Complaint under Item 9 of Schedule IV would be
maintainable. That being the position in law, violation of the
provisions of Standing Order 4-C would attract Item 9 of Schedule
IV of the MRTU & PULP Act."
33. We do not find any reasons to take a contrary view. In the
instant case, the Appellant has violated the mandatory provisions of
Section 12 of the EPF and MP Act. Hence, we do not find any reason
to interfere with the findings of learned Presiding Officer of Industrial
Court and the learned Single Judge of this Court that the Appellant
herein had indulged in unfair labour practice under item Nos. 9 of the
MRTU and PULP Act. Even otherwise we would also like to emphasize
Megha/pps 24/25
appeal_1118_2001.doc
here that the respondents/workmen who were driven to court to
protect their rights under the beneficial legislation have been
prosecuting the matter since the year 1994 and have since long retired
in pursuit of their rights. Considering this fact we do not wish to
nonsuit the respondents by driving them to another round of litigation.
34. Under the circumstances and in view of discussion supra,
the Appeal is partly allowed. The impugned orders are set aside to the
extent of direction given to the Appellant herein to desist from
engaging in unfair labour practice of item no.5 of schedule IV of the
MRTU & PULP Act and further direction to give benefits of 4 th Pay
Commission to the Respondent Nos.1 to 7. The Appellant is directed to
rectify the initial wage fixation so as to protect the PF contribution
under the Mill Grade and to give all the consequential benefits to the
Respondent Nos.1 to 7.
(ANUJA PRABHUDESSAI, J.) (A.S. OKA, J.)
Megha/pps 25/25
