Re-In The Matter Of Elephanta Oil & ... vs ..........
2019 Latest Caselaw 1935 Del

$~CP-5
*    IN THE HIGH COURT OF DELHI AT NEW DELHI
%                                           Date of decision: 09.04.2019
+      CO.PET. 115/1991
       RE-IN THE MATTER OF ELEPHANTA OIL &
       VANASPATI INDUSTRIES LTD.             ..... Petitioner
                     Through    Mr.D.K.Garg, Mr.Praveen Kapoor,
                     Mr.Dhananjay Garg, Mr.Abhishek and Ms.Harsha
                     Kapoor, Advs. for Ex.Director
                     Ms.Sangeeta Chandra, Adv. for Official Liquidator
                     Mr.Suryakant Singla, Mr.Shanto Mukherjee and
                     Ms.Rimjhim Naudiyal, Advs. for Workman Union
                     Mr.Ajeet Kumar, Adv. for workman Shri Satpal,
                     Shri Jagmohan, Shri A.K.Mittal and Shri Munni
                     Lal

+      CRL.O.(CO.) 5/2007
       M/S ELEPHANTA OIL AND VANASPATI
       INDUSTRIES LTD.                         ..... Petitioner
                       Through      Ms.Sangeeta Chandra, Adv.                 for
                       Official Liquidator
                       versus
       MR.VINOD KUMAR JAIN                     ..... Respondent

Through

CORAM:

HON'BLE MR. JUSTICE JAYANT NATH

JAYANT NATH, J.(ORAL)

1. I will by this order deal with the objections of Ghaziabad Vanaspati Udyog Karamchari Union to the report of the committee regarding the claims of the workmen. This order is passed pursuant to order of this Court dated 5.9.2018. By the said order dated 05.09.2018 the submissions of the learned counsel for the Union were noted. The order reads as follows:-

1. Ghaziabad Vanaspati Udyog Karmchari Union has filed objections dated 18.11.2015 to the report of the committee appointed by this court regarding examination of the claims of the various workmen. On 13.5.2013 this court had appointed M/s. Bhupinder Shah and Co. to examine the claims of the workmen and submit a report within a period of eight weeks thereof. On 10.10.2013 the Court had noted the plea of learned counsel for the Workmen that they should be heard by the company before any orders are passed. It was directed that Mr.Harsh, the Secretary of the Workers Union will contact M/s.Bhupender Shah & Company and collect the notices on behalf of the workmen and thereafter it was open to the workmen to present their viewpoints/contentions before the Committee who shall take the same into consideration before the report is finalized.

2. On 21.4.2014 this court had noted the submissions of learned counsel for the OL that the Chartered Accountant appointed for examining the claims of the workmen has reiterated that the claims submitted by certain workmen are exaggerated and not supported by relevant documents. The workmen were given a last opportunity to submit all necessary documents to M/s.Bhupender Shah and Company. The Chartered Accountant was directed to submit a final report determining the amounts payable to the workmen. Earlier also similar order has been passed on 5.2.2014.

3.The Chartered Accountant has now filed his report dated 16.1.2015. Present objections have been filed to the said report. A perusal of the report would show that the Chartered Accountant has scrutinised the claim of 121 workers and divided them into different categories. He has also noted that there was a settlement arrived at between the workers and the management on 16.2.1985. Based on the settlement he has categorised the workmen and the amount and noted the amount payable to each of the workers.

4. I have heard learned counsel appearing for the objectors, namely, the Ghaziabad Vanaspati Udyog Karmchari Union. Learned counsel has made the following submissions:-

(i) He has pointed out that as per the memorandum of settlement dated 16.2.1985 the workers were to be paid their dues upto May 1985

and the factory was not to be closed. Similarly, he has submitted that it was agreed that as soon as the allocation of imported oils to the company is started and the factory of the company is in a position to restart then in that case all the workers will join their duties with their old commitments. He submits that the import of vegetable oil haD been banned in 1983. The ban was lifted in May 1988. The Management has written to some of the workers asking them to rejoin their duties as a fresh employment. He submits that accordingly the workers would be entitled to their claims from 1988 till the provisional liquidator was appointed on 10.7.2006. He also relies upon a recovery certificate that has been issued by the Assistant Labour Commissioner, Ghaziabad on 18.7.1989 who has directed payment for months of April 1988-May 1989 amounting to Rs.30,61,580/-

(ii) He has further submitted that all the workmen had not signed the settlement agreement dated 16.2.1985. The Chartered Accountant has rejected some of the claims of workmen on the ground that they are not signatories to the agreement and would have ceased to be workmen on that date.

(iii) He further submits that settlement which was executed on 16.2.1985 cannot override the statutory provisions which would entitle the workmen to receive compensation in terms of the Industrial Disputes Act for retrenchment, namely, 15 days' salary for each year of service rendered and section 14 of the payment of Gratuity Act.

At this stage, learned counsel appearing for the Objectors submits that he needs some more time to make submissions to submit that the Settlement Agreement dated 16.2.1985 cannot deprive the workers of their dues under the Industrial Disputes Act, 1947 and under the Payment of Gratuity Act, 1972 and other statutory provisions.

To hear arguments on this aspect, list on 5.10.2018 at 2:15 PM.

2. I have heard learned counsel for the parties on the submissions noted in the above order. Learned counsel for the workman has stressed that the dispute in question relates to non-payment of the wages and other dues of the workers for the period May 1988 to 10th July, 2006 when the Provisional

Liquidator was appointed by this Court. It has been pointed out that the whole controversy started on account of the use of wrong Oil by the respondent company in the garb of vegetable oil which resulted in the license for import of oil of the respondent company being cancelled. He has stressed that under the Memorandum of Settlement dated 16.2.1985 the Workers were laid off for the period when the license to import oil was not available. The moment license was made available the factory had to restart and the workers had to be re-inducted. He states that in 1988 some of the workers were called back for employment meaning thereby that the factory had started production. He states that as per the Memorandum of Settlement dated 16.2.1985 the workers became entitled to be reinstated and to be taken back on work. Hence, the claim for wages and other dues is from the said date i.e. 1988 till the OL was appointed as Provisional Liquidator on 10.7.2006.

3. Learned counsel appearing for the Ex. Director Mr.Ravinder Pandey has, however, opposed the present application. He has submitted that the settlement that was arrived at on 16.2.1985 was under the U.P.Industrial Disputes Act, 1947. It is stated that this settlement binds the parties and the workers cannot claim de hors Settlement. It is also pointed out that there was no obligation on the part of the respondent company to reinstate the workmen in 1988 as has been claimed. In fact, it is pointed out that in 1988 the respondent company became a BIFR Company. Thereafter in 1991 the BIFR had recommended winding up of the respondent company and had referred the matter to this court for appropriate orders. This court on 10.7.2006 had admitted the petition and had appointed the OL as the Provisional Liquidator. He, hence, states that there was no occasion to

restore production and the question of reinstating the workman under the Memorandum of Settlement dated 16.2.1985 would not arise. He relies upon judgments of the Supreme Court in M/s. Hari Fertilizers vs. State of U.P. and Ors., JT 2000 (8) SC 236 and P.Virudhachalam and Others vs. Management of Lotus Mills and Another, (1998) 1 SCC 650.

4. Learned counsel appearing for the OL has pointed out that as per the order dated 13.5.2013 this court had appointed M/s Bhupinder Shah & Co. Auditors to examine the claims of the workmen. Several opportunities were given to the Workmen to make their submissions before the Chartered Accountant. On 21.4.2014 this Court gave a last opportunity to submit all necessary documents to M/s.Bhupinder Shah and Company. The Chartered Accountant had filed his report on 16.1.2015. The present objections have been filed by the Workers against the said report of the Chartered Accountant. Hence, she states that the workmen have been given adequate opportunity to present their viewpoint which they have failed to do as it is clear from the report of the CA.

5. Mr.Singla learned counsel appearing for the Workmen raised a preliminary objection about learned counsel appearing for Mr.Ravinder Pandey. He states that there is nothing to show that Mr.Ravinder Pandey was the Ex. Director of the respondent company.

6. As far as the objection of Mr.Singla, learned counsel for the workmen, regarding the submissions made by the counsels appearing for Mr.Ravinder Pandey the Ex.Director is concerned, in my opinion, learned counsel for Mr.Pandey has made legal submissions and no more. In fact he has assisted the court in adjudicating the present objections. I need not go into the controversy as to whether Mr. Ravinder Pandey was the Ex.

Director of the respondent company or not.

7. As far as the binding nature of the Memorandum of Settlement dated 16.2.1985 is concerned reference may be had to the provisions of the U.P.Industrial Disputes Act, 1947. Section 2(t) reads as follows:-

"2(t) „Settlement‟ means a settlement arrived at in the course of conciliation proceeding and includes a written agreement between the employer and workmen arrived at otherwise than in the course of conciliation proceeding where such an agreement has been signed by the parties there to in such a manner as may be prescribed and a copy thereof has been sent to the State Government and the Conciliation Officer.

8. Section 6-B reads as follows:

[6-B. Settlement outside conciliation proceedings-- (1) A settlement arrived at by agreement between the employer and workmen otherwise than in the course of conciliation proceeding shall except as provided in sub-section (4), be binding on the parties to the agreement:

Provided that if the period for which a settlement shall remain in force has not been laid down in such settlement itself, it remain in force for one year from the date of its registration. (2) As soon as settlement referred to in sub-section (1) has been arrived at, the parties to the settlement or any one of them may apply to the Conciliation Officer of the area concerned in the prescribed manner for registration of the settlement. (3) On receipt of application for registration under sub-section (2) the Conciliation Officer or an authority noticed by the State Government in this behalf, either: (i) register the settlement in the prescribed manner, or (ii) refuse registration if it considers it to be inexpedient to do so on public grounds affecting social justice, or if the settlement has been brought about as a result of collusion, fraud or misrepresentation.

(4) Where a settlement under sub-section (1) has been refused registration, it shall not be binding under this Act.]

9. Rule 5 of the U.P. Industrial Disputes Rules, 1957 reads as follows:-

[5. Memorandum of Settlement--(1) A settlement arrived at before a Conciliation Officer or otherwise outside the conciliation proceeding shall be in Form I.

(2) The settlement shall be signed--

(a) in the case of an employer, by the employer himself or by his authorised agent or when the employer is an incorporated company or other body corporate, by the agent, manager, or other principal officer of the corporation: and

(b) in the case of a workman, either by the workman himself or by the President or the Secretary of the Union of workmen, competent to represent the workman under section 6-I, or of a Federation of such Unions, or by an Officer of such Union or Federation authorised in this behalf by the President of such Union or Federation, or where there is no such Union, by five representatives of the workmen duly authorised in this behalf of at a meeting of the workmen held for the purpose. (3) Where a settlement is arrived at before a Conciliation Officer otherwise than in the course of conciliation proceedings before a Board, the Conciliation Officer shall send a report thereof to the Government with the copy of the Labour Commissioner, Uttar Pradesh.

(4) The State Government shall, subject to the provisions of clause (ii) of Section 7, issue orders in form III-A, for enforcing any settlement arrived at before a Conciliation Officer in the course of conciliation proceedings]

10. Hence, a settlement arrived at by an Agreement between the employer and the workmen other than in the course of conciliation proceedings would be binding on the parties. The settlement has to be registered. It is an admitted fact that in this case settlement was entered into has also been registered on 28.2.1985.

11. Learned counsel for the Workmen has placed reliance on clause 6 of the Settlement Agreement dated 16.2.1985 to support his submission. Clause

6 reads as follows:-

"6. Both the parties were agreed on this point also that as soon as the allocation of the imported oils to the company and the factory of the company is able to restart then in that case all the workers will join their duties with their old commitments."

12. Hence, as per the Settlement between the parties, namely, in case the company will restart production as soon as the oil becomes available then in that case the workers should be asked to rejoin their duties. In the present case the factory of the company was not able to restart as in 1988 it had gone to BIFR. In my opinion, the necessary conditions of the settlement agreement for re-induction of the workers, did not arise. The production in the company never restarted and hence, the workmen cannot claim any right for reinstatement under the settlement agreement.

13. It is also noteworthy that the workmen did not take any steps from 1988 till filing of the present claim somewhere in 2014 to claim that they are entitled for reinstatement in terms of the Memorandum of Settlement. This belated claim after 26 years itself shows that the same is an afterthought.

14. Reference may be had to the judgments relied upon by the learned counsel for the ex-management. In M/s.Hari Fertilizers vs. State of U.P. (supra) the Supreme Court had held as follows:-

"2. The scheme of the settlement of disputes under the U.P. Industrial Disputes Act, 1947 and the Industrial Disputes Act, 1947 [hereinafter referred to as „the Act‟] is identical except that under Section 6-B of the U.P. Act there is no provision corresponding to the Act. The High Court has, therefore, given a finding that this aforesaid provision is applicable in the State of U.P. This view of the High Court appears to be correct. It would only mean that settlement in the course of conciliation reached with the union or the unions representing the much

larger interest of the workmen would ordinarily be binding on majority of the unions. Undoubtedly, even a dispute not espoused by a union, but deemed to be a dispute under Section 2-A of the Act, a union can enter into settlement, in the larger interests of the workmen and the Industry."

15. Similarly, in P.Virudhachalam and Others vs. Management of Lotus Mills and another (supra) the Supreme Court held as follows:-

"1. A short but an interesting question arises for consideration in this appeal by certificate granted by the High Court of Judicature at Madras under Article 133(1) of the Constitution of India. It reads as under:

"Whether an individual workman governed by the Industrial Disputes Act, 1947 (hereinafter referred to as „the Act‟) can claim lay-off compensation under Section 25-C of the Act despite a settlement arrived at during conciliation proceedings under Section 12(3) of the Act by a union of which he is not a member and when such settlement seeks to restrict the right of lay-off compensation payable to such workman as per the first proviso to Section 25-C of the Act."

....

6. ........ The Act envisages two types of settlements between the warring groups of employer and employees. As defined by Section 2(p) of the Act, "settlement" means a settlement arrived at in the course of conciliation proceedings and includes a written agreement between the employer and workmen arrived at otherwise than in the course of conciliation proceedings where such agreement has been signed by the parties thereto in such manner as may be prescribed and a copy thereof has been sent to an officer authorised in this behalf by the appropriate government and the conciliation officer. Thus, a settlement which is based on a written agreement between the parties can be arrived at either in conciliation proceedings or even the parties can be arrived at either in conciliation proceedings or even the outside conciliation

proceedings between the representatives of the workmen on the one hand and the management on the other. But even if such written agreement signed by the parties is arrived at outside conciliation proceedings, it would become a settlement, once the prescribed procedure as envisaged by section 2(p) is followed. So far as settlements arrived at in the course of conciliation proceedings are concerned, section 12 of the Act deasl with the such settlements. As laid down by section 12(1) where any industrial disputes exists or is apprehended, the conciliation officer may, or where the disputes relates to a public utility service and a notice under section 22 has been given shall, hold conciliation proceedings in the prescribed manner. ........."

16. Hence, the Supreme Court was of the view that a written settlement between an employer and the workmen which is registered has to be treated as an agreement binding on the workers.

17. Keeping in view the said legal position, in my opinion, the Memorandum of Settlement dated 16.2.1985 is binding. I cannot accept the plea of learned counsel for the workmen that in terms of clause 6 of the Memorandum of Settlement ipso facto the workers were to resume their employment w.e.f. 1988. As there is no employment since 1988 no dues are payable for the said period. The objections are accordingly dismissed.

18. List on 20.8.2019.

JAYANT NATH, J.

APRIL 09, 2019/n corrected & released on 22.05.2019.