Megh Raj Jain vs The Presiding Officer, Labour ...
2004 Latest Caselaw 670 Del

JUDGMENT

Mukundakam Sharma, J.

1. The facts leading to filing of the W.P.(C) No. 529/1987and W.P.(C) 2954/2000 are inter-connected and the parties to the aforesaid two writ petitions are same. The issues arising out of the said writ petitions, therefore, being the similar and common they were taken up for consideration on the same day and, therefore, both the writ petitions are being disposed of by this common judgment and order. However, before discussing the issues which arise for my consideration, it would be appropriate to deal with the factual matrix leading to filing of both the aforesaid writ petitions.

W.P. (C) 529/1987

2. The aforesaid writ petition was registered on the basis of the writ petition filed by the petitioner challenging the legality and validity of the order passed by the learned Labour Court in its order dated 30th May, 1986. The said case was registered in the Labour Court on the basis of an application filed by the petitioner under Section 33-C(2) of the Industrial Disputes Act, 1947 claiming dues on various counts from the respondents including retrenchment compensation. By judgment and order dated 30th May, 1986 the learned Labour Court held that there was no relationship of employer and employee between the petitioner and M/s. Ashoka Marketing Limited and, therefore, the petitioner is not entitled to payment of any dues from M/s. Ashoka Marketing Limited.. It was further held that, however, the petitioner was entitled to a sum of Rs. 1801/- only from M/s. Bharat Overseas Private Limited. Being aggrieved by the aforesaid findings and the conclusion arrived at by the learned Labour Court, the aforesaid writ petition was filed by the petitioner in this court. It is, however, to be mentioned at this stage that during the pendency of the aforesaid proceeding in the Labour Court the petitioner dropped M/s. Jaipur Udyog Limited from the array of parties although originally the said company was also a party before the Labour Court.

W.P.(C) 2954/2000

3. The petitioner in this writ petition also approached the appropriate Government with a prayer for making reference of the dispute regarding his retrenchment of service by M/s. Bharat Overseas Private Limited. The Secretary, Labour refused to refer the said dispute as sought to be raised by the petitioner for adjudication under his order dated 30th November, 1982. Thereafter, the petitioner made an application on 6th November, 1986 praying for review of the order dated 13th November, 1982. However, in the said application filed, the Secretary, Labour made a reference on the following terms :-

"Whether the retrenchment of Sh. Meghraj Jain is illegal and unjustified and, if so, to what relief is he entitled and what directions are necessary in the matter?

4. The learned Labour Court received evidence adduced by the parties and heard the reference and thereafter answered the reference by holding that there was no relationship of employer and employee between the petitioner and M/s. Ashoka Marketing Limited and therefore, it was held that the petitioner is not entitled to any relief. Being aggrieved by the said award passed by the learned Labour Court the aforesaid writ petition was filed in this court. Therefore, in view of the aforesaid position, the primary issue that arises for my consideration is as to whether or not there is any relationship of master and servant/employer and employee between the petitioner and M/s. Ashoka Marketing Limited.

5. Counsel for the parties agreed with the aforesaid view during the course of their arguments and advanced their arguments during which they have also referred to certain documents, reference to which would be made during the course of my discussion. However, before discussing the aforesaid issue, which was raised, it would be appropriate to give a factual background pertaining to the service career of the petitioner. The petitioner joined M/s. Ashoka Marketing Limited as a clerk w.e.f 1st February, 1962. A confirmation letter of his service is also placed on record wherefrom it is indicated that the service of the petitioner was confirmed by M/s. Ashoka Marketing Limited w.e.f 1st November, 1962. On 27th July, 1968, a tripartite agreement was executed amongst M/s. Jaipur Udyog Limited, Ashoka Marketing Limited and Bharat Overseas Private Limited whereby the sole selling agency of M/s. Ashoka Marketing Limited with regard to cement manufactured by the Jaipur Udyog Limited came to end w.e.f 1st August, 1968 whereupon M/s. Bharat Overseas Private Limited was appointed as the sole selling agent of Jaipur Udyog Limited in place of M/s. Ashoka Marketing Limited. M/s. Bharat Overseas Private Limited took over the entire business of sale of cement of M/s. Ashoka Marketing Limited including the employees that were dealing with the sale of cement manufactured by the Jaipur Udyog Limited. The aforesaid fact was sought to be supported by the fact that on 27th July, 1968 M/s. Bharat Overseas Limited issued a letter to the petitioner whereby his services were taken over by it w.e.f 1st August, 1968. It was further stated in the said letter that w.e.f 1st August, 1968 the petitioner would be governed by the service rules and all the terms and conditions of service applicable to the employees of M/s. Bharat Overseas Private Limited. The said letter also indicates that the Executive Director of M/s. Ashoka Marketing Limited was to arrange for transfer of the leave account and also for provident fund accumulation of the petitioner with M/s. Ashoka Marketing Limited to the account of M/s. Bharat Overseas Private Limited. At the foot of the said letter dated 27th July, 1968 it is clearly indicated that the petitioner accepted taking over of his service by M/s. Bharat Overseas Private Limited. Consequently, the provident fund accumulation in the name of the petitioner in the account of M/s. Ashoka Marketing Limited was also transferred to the account of M/s. Bharat Overseas Private Limited. Later on, the service of the petitioner was taken over by M/s. Albion Plywood Limited from M/s. Bharat Overseas Private Limited, as is indicated from the letter dated 19th April, 1971, which on 18th January, 1972 again took over the service of the petitioner from M/s. Albion Plywood Limited. On 29th November, 1975, M/s. Bharat Overseas Private Limited terminated the service of the petitioner and the said termination was to take effect from the afternoon of 31st December, 1975. A further letter came to be issued by M/s. Bharat Overseas Private Limited on 31st December, 1975 to the petitioner informing him that he would be paid his dues and retrenchment compensation along with his wages. Consequent thereto the petitioner filed the aforesaid application under Section 33-C(2) of the Act as also the request to the State Government whereupon reference was made to the Labour Court.

6. A preliminary objection regarding the maintainability of the reference was raised not only before the Labour Court but also before this court by the counsel appearing for the respondent and, therefore, the said issue requires to be considered at this stage. It was submitted that after having refused to make a reference under order dated 30th November, 1982, there was no justification for the appropriate Government to make a reference, particularly when no fresh material was produced before the authority concerned in making the reference in the month of January, 1986. It was submitted that the aforesaid decision of the State Government in making the reference on a consequent representation was not based on any new material on record nor any justification has been given for making the aforesaid reference and, therefore, the reference being not permissible, the reference is bad and without jurisdiction.

7. A similar issue was raised before the Labour Court, on which the Labour Court expressed its opinion that the second reference was not valid. The Labour Court held that the request of the petitioner for making a reference was rejected by the appropriate Government on 30th November, 1982 on the ground that there was delay of ten years in raising the dispute and, therefore, no reference could have been made after a further delay of four more years and that also without offering any opportunity of hearing to the management. In support of the aforesaid contention the Labour Court relied upon a Division Bench decision of the Punjab & Haryana High Court reported in 1983 (1) LLN 688 followed in 1997 (1) LLN 233. However, in my considered opinion the Labour Court could not have gone into the aforesaid issue as it has not been vested with the power of deciding the validity of the reference. If the respondent was aggrieved by the aforesaid reference made, the same should have been the subject-matter of a writ petition in this court as has been held by the Supreme Court in NATIONAL ENGINEERING INDUSTRIES LIMITED VS. STATE OF RAJASTHAN AND OTHERS . In paragraph 27 of the said judgment the Supreme Court has held that an Industrial Tribunal cannot go into the question on validity of the reference and that it is the High Court which has jurisdiction to entertain a writ petition regarding validity of the reference. Even the findings of the Labour Court that no such request for second reference could have been made, particularly without affording any opportunity to the management, also appears to be contrary to the settled position of law as laid down by the Supreme Court in SULTAN SINGH VS STATE OF HARYANA & ANOTHER reported in (1996) 2 SCC 67 wherein the Supreme Court has held that even where reference is made by a State on a second representation after having refused to entertain the first one, there is no need of affording any opportunity of hearing to the management before making the reference. In the case of VIRENDRA BHANDARI VS. RAJASTHAN STATE ROAD TRANSPORT CORPN. AND OTHERS the Supreme Court has held that second reference is valid if there has been no adjudication of the industrial dispute on merits.

8. In the present case, the appropriate Government declined to make a reference under order 30th November, 1982 primarily on the ground of delay and not on merits whereas the Government on a second representation by the petitioner considered the matter on merit based on the report of the Conciliation Officer and was satisfied of existence of an industrial dispute and accordingly made the aforesaid order dated 30th January, 1986. In that view of the matter, the conclusion arrived at by the Labour Court in this case that the reference was bad in law is set aside and it is held that the aforesaid reference on the terms of reference as made is legal and valid and, therefore, such reference requires a decision. At this stage, it should be mentioned that although it was held by the Labour Court that the reference is bad and is without jurisdiction, yet the Labour Court expressed its opinion and gave its findings on the merit of the reference as well and, therefore, the said findings and conclusions are required to be scrutinised and a decision thereon is to be rendered by this court. As expressed hereinabove, the primary question that is involved in this petition is as to whether or not there is any relationship of employer and employee between the petitioner and M/s. Ashoka Marketing Limited. There cannot be any denial of the fact that pursuant to the tripartite agreement the service of the petitioner was placed with M/s. Bharat Overseas Private Limited. The letter placing the service of the petitioner with M/s. Bharat Overseas Private Limited is also placed on record, which is dated 27th July, 1968. The said letter states that the service of the petitioner had been taken over by M/s. Bharat Overseas Private Limited, the author of the letter from M/s. Ashoka Marketing Limited w.e.f 1st August, 1968 on the same emoluments and benefits as he was enjoying in M/s. Ashoka Marketing Limited and that thereafter he would be governed by the service rules and all the terms and conditions of service as applicable to the employees of M/s. Bharat Overseas Private Limited. It was also stated in the said letter that for the purpose of seniority, continuity of service, gratuity and provident fund, the date of entry of the petitioner into service will be the date which is noted in the records of M/s. Ashoka Marketing Limited for the purpose. On the bottom of the said letter there is an endorsement by the petitioner agreeing for the transfer of his service from M/s. Ashoka Marketing Limited to M/s. Bharat Overseas Private Limited on the terms and conditions as set out in the aforesaid letter of M/s. Bharat Overseas Private Limited and in acknowledgment thereof he has put his signature on the said letter on 1st August, 1968.

9. Even in spite of the aforesaid contents of the letter dated 27th July, 1968, counsel for the petitioner submitted that the aforesaid order was merely a transfer order placing the petitioner on deputation with M/s. Bharat Overseas Private Limited. It was submitted that M/s. Bharat Overseas Private Limited and M/s. Ashoka Marketing Limited are sister concerns and, therefore, inter-organisational transfer was also contemplated. In support of the said contention the counsel referred to service rules of M/s. Ashoka Marketing Limited. Reliance was placed specifically to two clauses in the said service rules, namely, Clause 12 and 23. Clause 12 provides that every employee would be bound when required by the company to work and assist in any other business, corporation or concern whereas Clause 23 provides that no employee would refuse to be transferred from one place or post to another at the discretion of the Company to any of its offices. It was submitted that while Clause 23 contemplated transfers within the offices of M/s. Ashoka Marketing Limited, Clause 12, on the other hand, contemplated transfers to other companies like sister companies like M/s. Bharat Overseas Private Limited and M/s. Albion Plywood Limited as they belong to the same group. It was submitted that the transfer of the petitioner from M/s. Ashoka Marketing Limited to M/s. Bharat Overseas Private Limited and then to M/s. Albion Plywood Limited and again from Albion Plywood Limited to M/s. Bharat Overseas Private Limited would prove and establish that such inter-organizational transfers amongst the sister companies was most common and prevalent on the basis of Clause 23 of the service rules and, therefore, the petitioner continued to be in service of M/s. Ashoka Marketing Limited and that there was a relationship of employer and employee between the petitioner and M/s. Ashoka Marketing Limited.

10. In the present case the service of the petitioner was terminated by M/s. Bharat Overseas Private Limited with effect from the afternoon of 31st December, 1975. It is also established from the records that M/s. Ashoka Marketing Limited, M/s. Jaipur Udyog Limited and M/s. Bharat Overseas Private Limited are distinct and separate legal entities. While M/s. Jaipur Udyog Limited and M/s. Ashoka Marketing Limited are Public Limited Companies, M/s. Bharat Overseas Private Limited was a Private Limited Company. The registered offices of the three aforesaid companies are at different places and they being three separate legal entities and three distinct and separate companies, account books were also being maintained separately.

11. The letter dated 27th July, 1968 also clearly states that the service of the petitioner was taken over by M/s. Bharat Overseas Private Limited from M/s. Ashoka Marketing Limited and that the service rules and the terms and conditions of service as applicable to the employees of M/s. Bharat Overseas Private Limited would also be applicable to the petitioner. The petitioner also agreed to the aforesaid terms and conditions as is clearly evident from the letter dated 27th July, 1968 as the petitioner has clearly put his signature while acknowledging the aforesaid terms and conditions. In his deposition also he has stated that it is correct that w.e.f 1st August, 1968 the staff dealing with cement in Ashoka Marketing were taken over by M/s. Bharat Overseas Private Limited. He has, however, denied that his consent was taken for his service being taken over by M/s. Bharat Overseas w.e.f 1st August, 1968. He further sought to state that a letter was issued to him but that was letter of transfer only but categorically admitted that Ex.AW4/3, which is a letter dated 27th July, 1968 is a letter by which his services were taken over by M/s. Bharat Overseas. He also admitted that the said letter bears his signature on the photo copy. He also admitted that his salary was paid by M/s. Bharat Overseas after 1st August, 1968 and that he was left with no connection with Ashoka Marketing in respect of grant of leave, provident fund, service condition etc. after 1st August, 1968. It is also established from the records that the leave account and the proident fund account of the petitioner was also transferred from M/s. Ashoka Marketing Limited to M/s. Bharat Overseas Limited and, therefore, the petitioner for all practical purposes became the employee of M/s. Bharat Overseas Limited.

12. In the light of the aforesaid facts and the evidence on record, I hold that there is no relationship of employer and employee between the petitioner and M/s. Ashoka Marketing Limited as by letter dated 27th July, 1968 the petitioner became the employee of M/s. Bharat Overseas Private Limited for all practical purposes to which status and position he also agreed to as is evident from the letter dated 27th July, 1968. As there is no relationship of employer and employee between the petitioner and M/s. Ashoka Marketing Limited, the petitioner could not have sought for the relief and, therefore, the learned Labour Court was justified in returning the finding that there is no relationship of master and servant and/or employer and employee between the petitioner and M/s. Ashoka Marketing Limited. I find no infirmity with the aforesaid two orders of the learned Labour Court, which are assailed in the present two writ petitions and are subject-matters of the said petitions. Accordingly, I find no merit in these two writ petitions and the same are dismissed.