Mrs. Jane Malik vs Deputy Labour Commissioner & Ors.
2010 Latest Caselaw 2536 Del

            *IN THE HIGH COURT OF DELHI AT NEW DELHI

+                           W.P.(C) 538/1999

%                                            Date of decision: 12th May, 2010

MRS. JANE MALIK                                         ..... Petitioner
                            Through: Mr. Vinay Sabharwal, Advocate.

                                    Versus

DEPUTY LABOUR COMMISSIONER & ORS.                          ..... Respondents
                Through: None.

CORAM :-
HON'BLE MR. JUSTICE RAJIV SAHAI ENDLAW
1.       Whether reporters of Local papers may
         be allowed to see the judgment?              No

2.       To be referred to the reporter or not?       No

3.       Whether the judgment should be reported      No
         in the Digest?

RAJIV SAHAI ENDLAW, J.

1. The petitioner carrying on business of finishing, packing and export

of various fancy items at Poultry Farm No.4, Papravat Road, Najafgarh,

New Delhi in the name and style of M/s Rulemak Overseas, instituted this

petition for quashing and setting aside of the order dated 30 th December,

1998 of the Deputy Labour Commissioner, Government of NCT of Delhi

for recovery of Rs.2,19,483/- due from the petitioner under Section 25-

N(7) of the ID Act.

2. The aforesaid order was made on a complaint of more than 100

persons represented through the All India Engineering and General

Mazdoor Union which has been impleaded as respondent no.3 inter alia to

the effect that they were all employed with the petitioner and had been

removed from work w.e.f. 1st September, 1998. The petitioner was called

upon to show cause as to why actions should not be taken against her for

violation of Section 25N of the Act. The petitioner by her reply contended

that she had never employed more than 20 workers and hence Section

25N(7) does not apply to her. However, the Deputy Labour Commissioner,

on the basis of the report of the Labour Inspector, found more than 100

workers working for the petitioner; it was also found that the petitioner was

paying less than the prescribed minimum wages. The Labour

Commissioner thus concluded that the petitioner had falsely contended that

she was employing less than 20 persons and the petitioner having failed to

take back the said workers, the order aforesaid impugned in this petition

came to be made.

3. This court vide ex parte order dated 29th January, 1999 while issuing

notice of the petition stayed the operation of the order aforesaid dated 30 th

December, 1998. However, subsequently after hearing the counsel for the

respondent no.3 Union, on 25th May, 1999 the petitioner was directed to

deposit the amount in the court and which the respondent no.3 Union was

permitted to withdraw subject to further orders. The petitioner preferred an

appeal being LPA 246/1999. Vide order dated 21st June, 1999 in the said

appeal, the petitioner, instead of being required to deposit the entire amount

of Rs.2,19,483/- was directed to deposit Rs. 1 lac in this court as a

condition for stay of recovery pursuant to the aforesaid order. The said

amount of Rs.1 lac was deposited in this court. The petitioner however

withdrew the appeal with liberty to approach the Single Judge for

appropriate orders. This court ultimately vide order dated 13th September,

2002, as a condition of stay, allowed the sum of Rs.1 lac deposited as

aforesaid by the petitioner to be withdrawn by the respondent no.3 subject

to filing an undertaking in this court to refund the amount in the event of

the writ petition succeeding. The amount has been so withdrawn by the

respondent no.3. Rule was issued in the petition on 25 th July, 2006. The

parties were referred to Lok Adalat but the matter could not be settled. The

respondent no.3 stopped appearing before the Lok Adalat and did not

appear when the matter was listed thereafter in the court on 6th May, 2009,

20th October, 2009 and 3rd February, 2010. On 3rd February, 2010 notice of

default was ordered to be issued to the counsel for the respondent no.3.

The notice has been received back with the endorsement that there is no

such advocate at the address. In the circumstances, need is not felt to await

contesting respondent no.3 any further and the contesting respondent no.3

is proceeded against ex parte. The counsel for the petitioner has been

heard.

4. The main contention of the counsel for the petitioner is that the

Labour Commissioner could not have directed recovery of any amount

from the petitioner without any determination. A perusal of the impugned

order dated 30th December, 1998 shows that there is no basis therein as to

how the sum of Rs.2,19,483/- sought to be recovered from the petitioner

has been computed. The pleading of the petitioner, as aforesaid, is that she

has been employing less than 20 persons only; that one Mr. Shaukat Ali

was working for her as Supervisor and used to disburse the wages to the

other employees; that the said Mr. Shaukat Ali started blackmailing the

petitioner and threatened her with having her implicated in labour disputes;

that the petitioner did not succumb to the said Mr. Shaukat Ali and it is the

said Mr. Shaukat Ali who has set up/ instigated the respondent no.3 union

to lodge complaints against the petitioners with the Labour Department.

5. The Deputy Labour Commissioner, before issuing the impugned

order of recovery aforesaid undoubtedly gave notices to the petitioner and

in response to which the petitioner controverted that she was employing

over 100 employees. Section 25N is contained in Chapter V-B of the ID

Act which applies only to those industrial establishments in which not less

than 100 workers are employed on an average per working day. Section

25N prohibits such industrial establishment from retrenching the workman

inter alia without prior permission of the appropriate Government. Sub-

Section (7) provides the consequences for retrenchment without special

permission; it lays down that the workman shall be entitled to all the

benefits in law for the time being in force.

6. The Division Bench of this court in M/s Colcom Plastic Ltd Vs.

Union of India MANU/DE/0178/1996 and in Weston Electronics Ltd Vs.

Union of India MANU/DE/0793/1996 in relation to Section 33 C(1) has

held that in case the employer raises bona fide dispute on the right of a

workman to claim of money, the appropriate Government has no right of

adjudication of such dispute and the workman will have to raise then an

industrial dispute for adjudication of the claims. The said dicta of the

Division Bench would apply with equal force to Section 25-N(7) also. The

appropriate Government / Deputy Labour Commissioner does not have any

adjudicatory powers.

7. In the present case the petitioner in response to the show cause

notices issued by the Deputy Labour Commissioner controverted the claim

of the respondent no.3 Union. Even though the petitioner failed to appear

before the Deputy Labour Commissioner but in the face of her denial of the

claims, the same could not have been adjudicated or deemed to be correct.

The Deputy Labour Commissioner ought to have directed the workman in

such case to raise a dispute. The counsel for the petitioner in this regard

relies on MCD Vs. Ganesh (1995) 1 SCC 235, Central Inland Water

Transport Corporation Limited v. The Workmen AIR 1974 SC 1604

laying down that there can be no adjudication under Section 33C(2). It is

contended that the same principle would apply to Section 25-N(7) also.

8. I therefore find that the respondent no.1 Deputy Labour

Commissioner was not entitled to issue the recovery certificate as done

vide order impugned dated 30th December, 1998 without any adjudication

of the claims of the respondent no.3 and/or its members. Section 25-N(7)

is only an enabling provision and/or a provision for rights. However, the

said rights have to be worked out/enforced by resorting to the provisions of

the Act. Section 25-N(7) does not empower the Deputy Labour

Commissioner to, on violation of Section 25N being alleged and the same

being denied by the employer, issue a certificate for recovery.

9. The petition therefore succeeds. The order dated 30th December,

`1998 of the Deputy Labour Commissioner is set aside and/or quashed.

However, since the respondent no.3 workmen did not finally contest the

petition, no order as to costs.

RAJIV SAHAI ENDLAW (JUDGE) 12th May, 2010 M