Structural Water Proofing ... vs Ms. S. Chakraborty And Another
2011 Latest Caselaw 4637 Del

     IN THE HIGH COURT OF DELHI AT NEW DELHI


+       W.P. (C) No. 8827/2007 & CM No. 16637/2007


%                         Judgment delivered on:20.09.2011

Structural Water Proofing
Company Private Limited                            ...... Petitioner

                     Through: Mr. Sushant Kumar with Ms.Shikha
                               Singh, Advocates.

                          Versus

Ms. S. Chakraborty and Another         ..... Respondents
               Through: Mr. Sanjay Ghoshe, Advocate


CORAM:
HON'BLE MR. JUSTICE KAILASH GAMBHIR

1.     Whether the Reporters of local papers may
       be allowed to see the judgment?           No

2.     To be referred to Reporter or not?          No

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

KAILASH GAMBHIR, J. Oral

*

1. By this petition filed under Article 226 of the Constitution

of India, the petitioner seeks to challenge order dated 10 th

August, 2007 passed by the learned Labour Court in ID No.

41/06 whereby the learned Labour Court directed the

reinstatement of the respondent workman with continuity of

service and with 50% backwages.

2. Assailing the said award, learned counsel appearing for the

petitioner submits that the learned Trial Court failed to

appreciate that the respondent No. 1 had left her job with the

petitioner in September, 1997 and thereafter there remained no

relationship of employer and employee between the parties.

Counsel also submits that in fact respondent No. 1 joined M/s

Cico Engineering Services Pvt. Ltd. on the post of Steno typist

w.e.f. 1st October, 2007 and there was no functional integrality

or interdependence between the petitioner company and M/s.

Cico Engineering Services Pvt. Ltd. Counsel further submits

that both the companies had separate constitution and they were

separately incorporated under the Companies Act and,

therefore, the learned Labour Court could not have given the

direction to the petitioner company to reinstate respondent No.

1 workman when clearly the services of respondent No. 1 were

terminated by the said company M/s Cico Engineering Services

Private Limited (hereafter referred as CES). Counsel also

submits that the learned Trial Court completely ignored the

admission of respondent No. 1 in her evidence and cross-

examination where she clearly admitted her employment with

M/s Cico Engineering Services Private Ltd. and also various

statutory deductions made by the said company on behalf of

respondent No. 1 employee. Counsel also submits that

respondent No. 1 employee was also paid her full and final

settlement dues amounting to Rs. 8936.30 and Rs. 6317/- by the

said company CES and not by the petitioner company. Based on

these submissions, learned counsel for the petitioner submits

that the impugned order passed by the learned Labour Court is

illegal and perverse on the very face of it and is liable to be set

aside.

3. Opposing the present petition, Mr. Sanjay Ghose, learned

counsel for the respondent submits that the petitioner has

merely sought to reagitate the disputed questions of facts, which

were properly and correctly appreciated by learned Labour

Court and this Court in the exercise of its writ jurisdiction would

not reappreciate the findings of facts arrived at by the learned

Labour Court. Counsel for the respondent further submits that

the learned Labour Court after taking into account the evidence

placed on record rightly came to the conclusion that respondent

No. 1 was always in the employment of the petitioner and the

functional integrality and interdependence of M/s Cico

Engineering Service Private Limited was clearly manifest from

the letter dated 22.9.1997 proved on record as Exhibit WW1/2,

which document clearly shows that M/s Cico Engineering

Services Pvt. Ltd. was a subsidiary of the petitioner company

and head office of both the said companies was at the same

place. In support of his arguments, counsel for the respondent

placed reliance on the following judgments:

1. MCD vs Asha Ram, 2005 Vol. II AD (Delhi) 285

2. Sadhu Ram vs Delhi Transport Corporation, AIR 1984 SC

3. Harbans Lal vs Jag Mohan, (1985) 4 SCC 333

4. Calcutta Port Shramik Union vs Calcutta River Transport Association & Ors., 1988(Supp.) SCC 768.

5. Sudhoo vs M/s. Haji Lal Mohd. Biri Works & Ors., 1990 Lab. I.C. 1538

4. I have heard learned counsel for the parties at

considerable length and given my thoughtful consideration to

the arguments advanced by them.

5. The sole contention raised by counsel for the petitioner is

that after the termination of the service of respondent No. 1 by

the petitioner company she was taken in employment by a

separate legal entity called M/s Cico Engineering Services Pvt.

Ltd. and for termination of services of respondent No. 1 by the

said company, no directions to the petitioner could be issued by

the learned Labour Court for reinstating respondent No.1 and

also for the grant of backwages. Counsel also took a stand that

respondent No. 1 did not even implead M/s Cico Engineering

Services Private Ltd. under whose employment the petitioner

had worked as steno typist. There is thus a denial of relationship

of employer and employee so far the petitioner and respondent

No. 1 are concerned. While denying subsequent employment of

respondent No.1, the petitioner has not disputed the fact that

initially the respondent was appointed on the post of Steno

Typist by the petitioner and then from 1st October, 1997 the

petitioner was taken in employment by M/s Cico Engineering

Services Private Limited. The learned Labour Court framed a

specific issue to determine whether there existed a relationship

of employer and employee between the petitioner and

respondent No. 1 or not, besides adjudicating the dispute in

terms of the reference. Issue No. 1 framed by the learned

Labour Court is referred as under:-

(1) Whether there existed relationship of employer and employee between the parties?

6. In support of her evidence, respondent No. 1 examined

herself as WW 1 while the petitioner had examined its Manager

Mr. Arun K. Dass Gupta as MW 1 and various documents from

both sides were also proved on record. Based on the evidence

led by the parties, the learned Labour Court found that

respondent No. 1 continued to remain an employee of the

petitioner company right from the date of her appointment. It

would be useful to refer to relevant paras of the impugned

award wherein the learned Labour Court has given the

reasoning for arriving at the aforesaid finding of the continued

existence of relationship between the petitioner and respondent

No. 1 as that of employer and employee. The said paras are

reproduced as under:-

"12. Ex. WW1/1 is showing that on 30/03/96 claimant was appointed to the post of Stenographer with M/s Structural Water Proofing Company Pvt. Ltd. and she was told to join from 08/04/96 in case the appointment was accepted. Ex. WW1/2 reveals that the contract division of M/s. Structural Water Proofing Company Pvt. Ltd. has merged with M/s. CICO Eng. Services Pvt. Ltd. w.e.f. 01/10/97 and since the contract division seized to exist from 01/10/97 all personnel of erstwhile contract division stands transferred to M/s CICO Engg. Services Pvt. Ltd. with effect from the same date and that the services of the claimant in the contract division of M/s Structural Water Proofing Company Pvt. Ltd. stood transferred w.e.f. 30/09/97. It was further clarified in this letter, however, the service, seniority, pay, bonus allowances, breaks and other facilities enjoined by the claimant in the contract division remained protected on her joining M/s CICO Eng. Services Pvt. Ltd., New Delhi.

13. However, a fresh joining letter in CES was being issued separately. This letter is also quite material to this controversy as to whether M/s CICO Eng. Services Pvt. Ltd. and M/s Structural Water Proofing Company Pvt. Ltd. were one and the same entity or not and were being run by one and the same management or not. It is evident from this Ex. WW1/2, which is on a letter head and the top of the letter head now being encircled in red marked "Y" on the right hand side is bearing the name of M/s Structural Water Proofing Company Pvt. Ltd. while the bottom left of the same letter head is showing the words "A CICO GROUP COMPANY" having Head Office at 21/1, Dover Road, Calcutta-700019. It is also showing the head office of this group of companies as being at Calcutta as rightly answered by the claimant during her cross examination regarding the employer code being same.

14. Ex.WW1/3 also on the letter head of the CICO Eng. Services Pvt. Ltd. is showing the named M/s CICO Engg. Services Pvt. Ltd. on the right it top corner encircled in red and marked "Y" while the bottom left of the letter head is again showing the words "A CICO GROUP COMPANY" and with the same registered office i.e. 21/2, Dover Road, Calcutta-700019. So is the case with Ex.WW1/5, Ex.MW1/2 and Ex.MW1/6.

15. In fact, my attention has been drawn to a letter which is not one of the exhibits tendered by either party but which is part of judicial record. This is a letter sent by Sh. Arun K. Dass Gupta shown as Deputy General Manager who was being an examined as MW-1 and in this letter be has informed my Ld. Predecessor that the claimant should be rejected. No period was also given in the letter whereas it was point blank denial of her ever having been in the employment as has been later stated in the W/s. Even the letter head shows the head office as being the same as that of M/s CICO Eng. Services Pvt. Ltd.

16. During arguments reference has been made on behalf of the claimant to section 2(ka) which lays down the meaning of an Industrial Establishment or undertaking as under:-

"S.2(ka)"Industrial establishment or undertaking" means an establishment or undertaking in which any industry is carried on Provided that where several activities are carried on is an establishment or under and only one or some of such activities is or are an industry or industries, then-

(a).........

(b) if the predominant activity or each of the predominant activities carried on in such establishment or undertaking or any unit thereof is an industry and the other activity or each of the other activities carried on in such establishment, or undertaking or unit thereof is not severable from and is, for the purpose of carrying on, or aiding the carrying of, such predominant activity or activities, the entire establishment or undertaking or as the case may be, unit thereof shall be deemed to be an industrial establishment.

17. In view of above discussion, it is clear that claimant very well continued to be an employer of M/s Structural Water Proofing Co. Pvt. Ltd. as on 10/01/2000 right from her appointment w.e.f. 08.04.96. Issue No.1 is according decided in favour of the workman and against the management."

7. During the course of the arguments, no explanation could

be offered by counsel representing the petitioner so as to

persuade this Court to take a contrary view than the one arrived

at by the learned Labour Court to hold that there existed no

relationship of employer and employee between the petitioner

and respondent No.1, specially after respondent No. 1 was taken

in employment by M/s. Cico Engineering Services Private

Limited. In the letter heads of correspondence exchanged

between M/s Cico Engineering Services Private Limited and the

said respondent No. 1, it has been clearly disclosed that the said

company CES is a subsidiary of the petitioner company alone

and even their head offices were at the same address. There

cannot be any doubt about the proposition that merely because

from the same address both the companies were operating or an

employee joining the subsidiary company would necessarily

mean that there is functional integrality between the said

companies, but considering the facts of the present case and

also the fact that initial employment of respondent No.1 was

with the petitioner, this Court does not find any perversity in the

findings and reasoning given by the learned Labour Court based

on the material on record that respondent No. 1 continued to be

in the employment of the petitioner. False deposition on the part

of the petitioner denying subsequent employment of respondent

No. 1 got totally exposed from a letter sent by Mr. Arun K. Dass

Gupta, Deputy General Manager, which letter was produced by

him before the Court wherein he completely denied that

respondent No.1 was ever on the pay rolls of the petitioner

company. The stand of the petitioner was thus self contradictory

and it is thus quite evident that the petitioner continued to

remain an employer of respondent No. 1 even after having

placed the service of respondent No. 1 with its subsidiary

company M/s Cico Engineering Services Private Limited. It is a

settled legal position that the burden to prove the relationship of

employer and employee is on the employee. This court is of the

considered view that the respondent no.1 herein has successfully

discharged the burden which is evident form the letters WW1/2,

WW1/3 and other evidence produced before the labour court.

When challenging the order of the learned labour court, the

burden shifted on the petitioner to prove otherwise, which it has

failed to discharge.

8. There is no single test to determine the relationship

of employer and employee between the parties when it is

specifically denied by the management. There can be the

organizational test, the control test or any other test which can

be applied according to the facts of the case. In the present case

the employment of the respondent was with the petitioner

company and with the subsidiary of the same company

thereafter and thus the petitioner cannot in any event shirk the

responsibility towards the respondent by a smokescreen of

another subsidiary company. It is also a settled legal position

that the Labour Courts are final Courts so far the findings of

facts are concerned and the High Court in the exercise of its writ

jurisdiction would interfere in the finding of such facts only

when they are patently perverse, irrational or contrary to the

documentary material and evidence on record or the findings of

the labour Court are based on no evidence. This Court does not

find that any such situation exists in the facts of the present

case, therefore, this Court is not persuaded to take any view

contrary to the one expressed by the learned Labour Court in

the impugned judgment.

9. There is no merit in the present petition and the same is

hereby dismissed.

20th September, 2011                  KAILASH GAMBHIR, J.
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