Brooke Bond Employees Union Thr ... vs Hindustan Unilever Limited Thr ...
2021 Latest Caselaw 15614 Bom

     LPA 507-11                                      1                     Judgment

                  IN THE HIGH COURT OF JUDICATURE AT BOMBAY,
                            NAGPUR BENCH, NAGPUR.
LETTERS PATENT APPEAL NO. 507/2011 IN WRIT PETITION NO. 1133/2002 (D)
                                WITH
                CROSS-OBJECTION STAMP NO.2805/2012

     Brooke Bond Employees Union,
     C/o R.T. Wankhede, Plot No.127,
     Shilpa Nagar, Narendra Nagar, Nagpur
     400015 through its General Secretary.                              APPELLANT
                                       .....VERSUS.....
     1.   Hindustan Unilever Limited,
          through its Regional Manager,
          having its office at Uttara, Plot No.2,
          Sector 11, CBD Belapur, New Mumbai 400 614.
     2.   Hindustan Lever Limited,
          through its Chairman, Hindustan Lever House,
          165/166, Backbay Reclamation, Mumbai.
     3.   M/s Hindustan Lever Ltd.,
          Hindustan Lever House, 165/166, Backbay
          Reclamation, Mumbai 400 020 through
          its Regional Personnel Manager (West),
          (Unit Manager-Regional Accounts Office,Nagpur).
     4.   Member,
          Industrial Court, Maharashtra,
          Nagpur Bench, Civil Lines, Nagpur.                     RESPONDENTS
     __________________________________________________________________________
            Shri S.D. Thakur and Shri D.S. Thakur, counsel for the appellant.
                 Shri H.V. Thakur, counsel for the respondent nos.1 to 3.

     CORAM : A. S. CHANDURKAR AND G.A. SANAP, JJ.
     DATE ON WHICH ARGUMENTS WERE HEARD : 05TH OCTOBER, 2021.
     DATE ON WHICH JUDGMENT IS PRONOUNCED : 29TH OCTOBER, 2021.
     JUDGMENT        (PER : A.S. CHANDURKAR, J.)

This letters patent appeal filed under Clause 15 of the letters

patent takes exception to the judgment of the learned Single Judge dated

21.10.2011 in Writ Petition 1133 of 2002. By the said judgment, the writ

petition preferred by the respondent nos.1 to 3 herein for challenging the

judgment passed by the Industrial Court Nagpur on 27.02.2002 has been

allowed and that judgment passed by the Industrial Court allowing the

complaint filed by the appellant has been set aside.

LPA 507-11 2 Judgment

2. The brief facts that are relevant for deciding the challenges as

raised are that it is the case of the appellant-Union through its General

Secretary that it comprises of the employees of the erstwhile Brooke Bond

India Limited. The said company was subsequently acquired by

Hindustan Lever Limited through its parent company in the year 1984.

The parent company had also acquired another company named Lipton

India Limited. Both these companies were then merged in the year 1994

to form Brooke Bond Lipton India Limited. This company was then

merged into Hindustan Lever Limited. According to Union the Federation

of its employees is the apex body of trade unions. From 1962 onwards

various agreements were entered into by the Federation with the

Management of Brooke Bond India Limited concerning service conditions

and pay-scales of its employees. According to the Union representing

about nineteen employees of the Regional Accounts Office, Nagpur the

activities of the Regional Accounts Office and the manufacturing activities

carried out at different factories especially the factory at Kanhan were

interrelated and interdependent. All of them were thus constituted one

industrial establishment. The services of the employees of Brooke Bond

India Limited were transferable from various factories to the Regional

Accounts Office and vice versa. On 05.01.2001 a notice of closure was

displayed by the Management at the Regional Accounts Office, Nagpur.

As per that notice which was not preceded by a notice of change as

required by Section 9A of the Industrial Disputes Act, 1947 (for short, 'the

Act of 1947') the activities of the Regional Accounts Office, Nagpur were LPA 507-11 3 Judgment

closed down. Since this notice of closure did not contain any reason and

was issued without granting any opportunity to the members of the

Union, the same resulted in commission of unfair labour practice within

the meaning of Item 9 of Schedule IV of the Maharashtra Recognition of

Trade Unions and Prevention of Unfair Labour Practices Act, 1971 (for

short, 'the Act of 1971'). On the aforesaid premise, the Union approach

the Industrial Court by filing complaint under Sections 26, 27 and 28 of

the Act of 1971 alongwith Items 4(f), 5 of Schedule II and Item 7 and 9 of

Schedule IV to the Act of 1971.

3. The Management filed its written statement at Exhibit 25 and

opposed the prayers made in the complaint. It was pleaded that the

notice of closure issued on 05.01.2001 was in accordance with the

provisions of law and the various agreements entered into with the

Federation. It was denied that there was any functional integrality

between the Regional Accounts Office and any other establishment of the

company. Since no work was available at the Regional Accounts Office

from January-2000 the Management had offered two alternatives to the

members of the Union namely, an option of accepting voluntary

retirement alongwith monetary benefits or the option of re-deployment as

per Clause 29 of the settlement dated 27.07.1999. Since both these

options were refused, the Management offered statutory dues to the

nineteen employees while terminating their services on account of closure

of the Regional Accounts Office.

LPA 507-11 4 Judgment

4. The Industrial Court considered the complaint on merits and

after examining the evidence on record held that the action of closure was

in violation of the provisions of Sections 25-O and 9A of the Act of 1947.

After holding the closure to be illegal, the Industrial Court directed the

Management to restore the position that was existing prior to 05.01.2001

by withdrawing the retrenchment notice.

The Management being aggrieved by the aforesaid judgment

challenged the same in Writ Petition No. 1133 of 2002. The learned

Single Judge in his detail judgment recorded a finding that the closure of

the Regional Accounts Office was governed by the terms of various

agreements between the Management and the Federation. The Regional

Accounts Office was not functionally integrated with other establishments

of the Company. Moreover, in view of the proviso to Section 9A of the Act

of 1947 there was no need to issue any notice of closure under Section 9A

of the Act of 1947. On the basis of these findings the judgment of the

Industrial Court was set aside and the writ petition was allowed. Being

aggrieved by the aforesaid judgment, the Union has preferred the present

letters patent appeal while the Management has preferred cross-

objections seeking to challenge certain adverse findings recorded against

it.

5. Shri S.D. Thakur, learned counsel for the appellant-Union

reiterated the submissions that were canvassed before the learned Single

Judge while supporting the order passed by the Industrial Court.

LPA 507-11 5 Judgment

According to him, the notice of closure dated 05.01.2001 was illegal

since there was no reason mentioned therein that prompted closure

of the Regional Accounts Office. Referring to the provisions of

Section 25FFF of the Act of 1947 it was submitted that the workmen

were entitled to notice and compensation in accordance with the

provisions of Section 25F of the Act of 1947. The conditions precedent

to retrenchment of workmen as stipulated therein required giving of

one month's notice in writing indicating reasons for such

retrenchment. Since the requirements of such Clauses (a) and (b) of

Section 25F were mandatory in nature, the non-compliance in that

regard rendered the notice of closure void ab initio. In that regard, the

learned counsel placed reliance on the decisions in Gammon India

Limited Versus Niranjan Dass [(1984) 1 SCC 509], Pramod Jha &

Others Versus State of Bihar & Others [(2003) 4 SCC 619], Rajasthan

Lalit Kala Academy Versus Radhey Shyam [(2008) 13 SCC 248],

Mohan Lal Versus Management of M/s Bharat Electronics Ltd. [(1981)

3 SCC 225], Union of India Versus Mohan Lal Capoor & Others [(1973)

2 SCC 836] and D.K. Yadav Versus J.M.A. Industries Ltd. [(1993) 3

SCC 259].

It was then submitted that in the facts of the case the

provisions of Section 25-O of the Act of 1947 were applicable.

Since the activities of the Regional Accounts Officer were dependent on

the activities of other establishments of the Company, it formed an

integral part of the entire establishment. The finding to the contrary LPA 507-11 6 Judgment

recorded by the learned Single Judge was without any legal basis

and the same was liable to be set aside. Reference was made in that

regard to the decision in S.G. Chemicals and Dyes Trading

Employees' Union Versus S.G. Chemicals and Dyes Trading Limited &

Another [(1986) 2 SCC 624]. Absence of notice of closure under

Section 9A of the Act of 1947 also vitiated the notice of closure.

The reliance placed on the proviso to Section 9A of the Act of 1947

by the learned Single Judge was erroneous. Inviting attention to

various settlements that were entered into under Sections 2(p) and 18

of the Act of 1947 it was submitted that the modalities prescribed

therein were binding on both the parties and failure to abide by the

terms of settlement resulted in attracting the provisions of Item 9 of

Schedule IV to the Act of 1947. It was not permissible for the

Management to unilaterally modify or vary the settlements and by

doing so an unfair labour practice was committed by the Management.

Reliance was placed on the decisions in M/s Tata Iron and Steel Co. Ltd.

Versus The Workmen & Others [(1972) 2 SCC 383] and Lokmat

Newspapers Pvt.Ltd. Versus Shankarprasad [(1999) 6 SCC 275]. It was

thus submitted that the Industrial Court having rightly considered the

entire material on record and thereafter having granted relief to the

Union, its judgment ought not to have been interfered with by the learned

Single Judge. It was prayed that the order passed by the Industrial Court

be restored.

LPA 507-11 7 Judgment

6. Shri H.V. Thakur, learned counsel for the respondent nos.1 to

3-Management supported the judgment of the learned Single Judge.

According to him the learned Single Judge by applying the correct legal

tests in the light of the material on record was justified in holding that

there was absence of functional integrality between the activities of the

Regional Accounts Office and other establishments of the Company. As

per the various settlements with the Federation, the Management had

clearly indicated its desire to close down the activities of the Regional

Accounts Office at Nagpur. Appropriate options were given to the

employees therein but the same were not accepted by them. There was

no option therefore to close down the Regional Accounts Office and hence

it was not correct to contend that the same amounted to retrenchment.

Referring to the provisions of Section 2(cc) and 2(oo) of the Act of 1947

it was submitted that retrenchment required existence of a live industry

which was in contra-distinction with a permanent closing down of a place

of employment or part thereof. He urged that the provisions of Section

25-O were not applicable in the facts of the case and it was rightly held by

the learned Single Judge that by virtue of the proviso to Section 9A of the

Act of 1947 notice of closure was also not required to be issued. He

referred to the decisions in L. Robert D'Souza Versus The Executive

Engineer, Southern Railway & Another [AIR 1982 SC 854], Alarsin &

Alarsin Marketing Employees Union Versus Alarsin Pharmaceuticals &

M/s Alarsin Marketing Pvt. Ltd. & Another [2004 II CLR 888] and Anglo-

French Drugs and Industries Ltd. Versus Roche/Anglo-French Employees' LPA 507-11 8 Judgment

Union [2005 (3) Mh.L.J. 1120] in that regard. According to him various

findings recorded by the learned Single Judge were based on the evidence

on record and those findings were not shown to be perverse. He also

referred to the evidence on record to substantiate his contentions.

According to him compliance with the provisions of Section 25-F was not

a condition precedent for closure of an establishment. It was relevant

only when retrenchment was to be effected. The provisions of Sections

25-F and 25-O could not go together. As regards the findings recorded by

the learned Single Judge that the Union was competent to file the

complaint it was submitted that the Constitution of the Union and

especially Clause 10(C) did not permit the General Secretary to file the

complaint in absence of any grievance made by any workman to the

Union in writing. He referred to the decisions in Punjab University

Versus V.N. Tripathi & Another [(2001) 8 SCC 179], Dale & Carrington

Invt. (P) Ltd. & Another Versus P.K. Prathapan & Others [(2005) 1 SCC

212] and M/s Nibro Limited Versus National Insurance Co. Ltd. [AIR

1991 Delhi 25] in that regard. It was further urged that closure of the

Regional Accounts Office was not a local issue as held by the learned

Single Judge. It was an All India issue pursuant to the settlements with

the Federation. The Union was therefore not competent to question the

notice of closure when it was not a party to various settlements. The

Federation was not brought in picture by the Union nor was any Office

bearer of the Federation examined. Further, the finding recorded that the

interim payments made to the workmen were justified in view of the LPA 507-11 9 Judgment

provisions of Section 17B of the Act of 1947 was also incorrect.

The requirements of Section 17B had not been satisfied since there

were no affidavits filed regarding absence of gainful employment.

However, he submitted that as a policy decision, the Management was

not desirous of pressing the aspect of recovery of payments already

made. It was then submitted that since the cause of action for filing the

complaint was the termination of nineteen employees, the Union

ought to have approached the Labour Court and not Industrial Court.

In that context reliance was placed on the decisions in Rajneesh

Khajuria Versus Wockhardt Limited & Another [(2020) 3 SCC 86],

Shankarprasad And Lokmat Newspapers Pvt. Ltd., Nagpur [1997 II LLJ

195], Executive Engineer, Electrical Division, Nagpur & Another

Versus Prakash Devidas Kalasit [1985 Mh.L.J. 338], Pepsico India

Holdings Pvt. Ltd. And Noshir Elavia & Another [2002 II LLJ 721]

and Manoj Amdas Ingle & Others Versus Member, Industrial Court,

Nagpur & Another [2004 (3) Mh.L.J. 41]. It was thus submitted

that considering the fact that the entire material on record

had been considered by the learned Single Judge there was no

reason to interfere with the impugned judgment. However, the

adverse findings as challenged in the cross-objection were liable to be set

aside.

7. We have heard the learned counsel for the parties at length

and with their assistance we have also perused the material that was LPA 507-11 10 Judgment

placed on record by the parties. Before considering the applicability of

the relevant statutory provisions on which the learned counsel for the

parties have relied, it would be necessary to first refer to the findings

recorded by the learned Single Judge after considering the evidence on

record. It has been found by the learned Single Judge that the

settlements from 24.01.1962 to 27.07.1999 which are at Exhibits 53 to 59

were entered into between the Federation and the Management under

Section 2(p) read with Section 18(1) of the Act of 1947. Under these

settlements a need was expressed by the Management for restructuring

and re-organization of its activities in a phased manner. Initially the sales

depots were closed and the sales system was replaced by the system of

acquiring and forwarding agents and re-distribution of stockists. The

number of Area Sales Offices/Branch Offices were reduced to five.

Nagpur Area Sales Office was also closed down and the entire accounting

work was agreed to be carried out from the Regional/Branch Office at

Mumbai. As a result of re-organization of Company's activities option was

given to the employees to either opt for voluntary retirement or to agree

for re-deployment. It is in the light of these settlements that it has been

held that the closure of the Regional Accounts Office was governed by the

various settlements with the Federation. Yet another finding recorded is

that the Regional Accounts Office was not part and parcel of the

manufacturing process of the Company. There was no evidence found on

record to hold that the Regional Accounts Office, Nagpur formed part and

parcel of the manufacturing process undertaken by various factories. It is LPA 507-11 11 Judgment

on this basis that it was concluded that there was no material on record to

satisfy the test of functional integrality, interdependence and

componential relationship between the Regional Accounts Office and the

various factories. On this basis it has been held that the provisions of

Section 25-O(1) of the Act of 1947 were not attracted. The closure was

governed by the provisions of Section 25FFF and that course had been

duly followed.

8. We find that the aforesaid findings going to the root of the

matter have been recorded after considering the relevant material on

record. Once it is found that the closure of the Regional Accounts Office

at Nagpur was pursuant to the settlements between the Federation and

the Management the proviso to Section 9A would stand attracted. As per

the said proviso, no notice of change would be required to be given if

such change is effected pursuant to any settlement or award. The Union

has not been in a position to demonstrate that the closure of the Regional

Accounts Office as per notice dated 05.01.2001 was not pursuant to the

settlement at Exhibits 53 to 59. Reliance has been rightly placed on the

decision of the learned Single Judge in Anglo-French Drugs and

Industries Ltd. (supra) by the learned counsel for the Management that

for alteration of the conditions of service, existence of a live industry is

necessary. On the factum of closure being established there would be no

occasion to hold that such closure amounted to alteration of the

conditions of service.

LPA 507-11 12 Judgment

As regards the finding recorded by the learned Single Judge

that the closure of the Regional Accounts Office was a local issue, the

basis for that conclusion is that in none of the settlements was any

provision made to enable the parties to the settlement to raise a question

about illegal closure. In absence of any such modality it was held that the

Union by espousing the case of its members at Nagpur was competent to

do so and the same was thus a local issue. We do not find any reason to

take a different view of the matter and on perusal of various settlements

the aforesaid aspect is clear. For the same reason it was not necessary for

the Federation to come in the picture in the present proceedings nor was

it required to examine any witness in that regard. Similarly, the finding

recorded that the jurisdiction of the Industrial Court was rightly invoked

also does not require any interference since what was challenged was the

notice of closure on the premise that it was in breach of the settlement

entered into. Admittedly, the provisions of Item I of Schedule IV to the

Act of 1971 had not been invoked and thus the Industrial Court was

competent to entertain the same. The substantive claim made in the

complaint was with regard to the illegal closure of the RAO at Nagpur on

the premise that it was in breach of the settlements between the parties

and hence the provisions of Item 9 of Schedule IV to the Act of 1971 were

rightly invoked by the Union. The ratio of the decision in Lokmat

Newspapers Pvt. Ltd. (supra) has been rightly held to be not applicable to

the facts of the present case.

LPA 507-11 13 Judgment

9. As regards the competence of the General Secretary to file the

complaint before the Industrial Court, it is seen that the learned Single

Judge has found that the complaint was filed by the registered Union and

that Shri Rajhans was its General Secretary. The judgments cited in the

cases of Dale & Carrington Invt. (P) Ltd. And M/s Nibro Limited (supra)

have been dealt with. We are in agreement with the finding recorded in

paragraphs 19 to 23 of the judgment of the learned Single Judge in that

regard.

10. We thus find on a re-consideration of the material on record

in the context of the findings arrived at by the learned Single Judge that

the learned Single Judge was legally justified in setting aside the

judgment passed by the Industrial Court. The closure of the Regional

Accounts Office at Nagpur being pursuant to various settlements, the

notice dated 05.01.2001 given to that effect did not result in constituting

an unfair labour practice. We therefore do not find any reason to

interfere with the judgment of the learned Single Judge. In the passing

we may observe that by virtue of the interim orders passed in the year

2002 the nineteen employees were being paid last drawn wages and

according to the Management this payment is approximately

Rs.2,50,00,000/- (Rupees Two Crores Fifty Lakhs). We find that the

interim orders as passed have resulted in meeting the ends of justice

especially when the Management as a policy matter has decided not to

agitate this aspect.

LPA 507-11 14 Judgment

11. For aforesaid reasons the judgment of the learned Single

Judge in Writ Petition No.1133 of 2002 stands confirmed. Letters Patent

Appeal alongwith Cross-Objection stand dismissed leaving the parties to

bear their own costs.

             (G.A. SANAP, J.)           (A.S. CHANDURKAR, J.)
APTE




                                                    Signed By: Digitally signed
                                                    byROHIT DATTATRAYA
                                                    APTE
                                                    Signing Date:30.10.2021 13:15