Cera Sanitaryware Limited vs State Of Gujarat
2022 Latest Caselaw 5349 Guj

    C/SCA/15907/2020                               CAV JUDGMENT DATED: 22/06/2022




               IN THE HIGH COURT OF GUJARAT AT AHMEDABAD

                R/SPECIAL CIVIL APPLICATION NO. 15907 of 2020
                                    With
                R/SPECIAL CIVIL APPLICATION NO. 16326 of 2020

FOR APPROVAL AND SIGNATURE:

HONOURABLE MR. JUSTICE BIREN VAISHNAV

==========================================================

1 Whether Reporters of Local Papers may be allowed to see the judgment ?

2      To be referred to the Reporter or not ?

3      Whether their Lordships wish to see the fair copy
       of the judgment ?

4      Whether this case involves a substantial question

of law as to the interpretation of the Constitution of India or any order made thereunder ?

========================================================== CERA SANITARYWARE LIMITED Versus STATE OF GUJARAT ========================================================== Appearance:

IN SCA No. 15907 of 2020 MR. K.M.PATEL, SENIOR COUNSEL WITH MR.VARUN K. PATEL for the Petitioner(s) No. 1.

MR. SOAHAM JOSHI, AGP, for the Respondents No. 1,2,3. MR. HARSH K RAVAL, ADVOCATE , for the Respondent No.4. IN SCA No. 16326 of 2020 MR. HARSH K RAVAL, ADVOCATE ,for the Petitioner(s) No. 1 MR. AMRISH N PATEL, ADVOCATE, for the Petitioner(s) No.1 MR. SOAHAM JOSHI, AGP, for the Respondents Nos. 1. MR. K.M.PATEL, SENIOR COUNSEL WITH MR.VARUN K. PATEL for the Respondent(s) No.2.

========================================================== CORAM:HONOURABLE MR. JUSTICE BIREN VAISHNAV

Date : 22/06/2022

CAV JUDGMENT

1 Special Civil Application No. 15907 of 2020 has been filed by

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the Company Cera Sanitaryware Limited for issuing a writ of mandamus and / or any other appropriate writ, order or direction in the like nature requiring the respondent Nos.1 to 3 to enforce the Notification dated 16.10.2020 prohibiting strike and to initiate proceedings for offences punishable under Sec.26, 27, 28, 29 and 25 (U) of the Industrial Disputes Act, 1947, against the respondent No.4, the Gujarat Mazdoor Sabha, a Union and further direct the Union and its office bearers to call off the illegal and unjustified strike. The Gujarat Mazdoor Sabha (hereinafter referred to as "a Union") has filed Special Civil Application No. 16326 of 2020 for a prayer to quash and set aside the same Notification dated 16.10.2020 and the amendment dated 06.11.2020 prohibiting strike under Sec. 10(3) of the Industrial Disputes Act, 1947, and further hold that the notification prohibiting strike is violative of the fundamental rights. The direction is also prayed for to direct the respondent - State to refer the demands raised by the Union in its letters dated 04.08.2020 and 26.08.2020 as well as to refer the term of reference that "Was there an illegal lockout and / or refusal of work by the respondent company from 29.09.2020 and whether the workmen are entitled to the wages and all other benefits till they are permitted to resume work".

2 Facts in brief in both the petitions would indicate that it is the case of the Company, Cera Sanitaryware Limited, that the Company which is engaged in manufacturing of sanitarywares, tiles etc., has 1350 shop floor workers. Such workers were members of the Akhil Gujarat General Majdoor Sangh. A settlement was arrived at with

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the Union in the course of conciliation proceedings under Sec.18(3) on 04.08.2017 with regard to wages and other conditions of service. The duration of the settlement was four years commencing from 01.09.2017 upto 31.08.2021. As per the terms of the settlement the management and the workmen had agreed that any dispute would be resolved through constitutional means. The settlement also included a term which clarified that the incentive payment will not be treated as wages and the management will be entitled to alter the scheme of settlement.

2.1 The case of the Company is that because of a misconception as to the modification in the insentive scheme, the workmen resorted to strike on 09.06.2020 and 10.06.2020 which was subsequently called off. On 04.08.2020, a communication was received by the Company from the Union informing them that the workmen had joined the Gujarat Mazdoor Sabha and a notice was given that the changes in the wages be withdrawn. Certain acts of misconduct resulted and the workmen resorted to sitting strike on 10.08.2020 and 11.08.2020 at the instigation by the Union. The factory then resumed work and at the instigation of the Union, the workmen resorted to strike on 28.09.2020. Several notices were issued from time to time publishing them on the notice board, in the newspapers by sending SMS's individually to the workmen to call off the unjustified strike, to which the workmen did not respond. During the period of time, the Assisstant Commissioner of Labour, Mehsana and the Government Labour Officer visited the factory on 29.09.2020, 02.10.2020, 05.10.2020 and other dates and observed that it was the

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workmen who were not willing to respond and report for duty and on the intervention, though it was tried to be resolved it could not be and the State Government had therefore passed an order dated 16.10.2020 while making a reference under Sec.10(1) of the Industrial Disputes Act, of the disputes which led to the strike and then under Sec.10(3) of the Act, prohibits strike in exercise of its power. The order was amended on 06.11.2020 and the dispute was shown to be a reason between the Company and the Union.

3 Mr.K.M.Patel, learned Senior Advocate appearing with Mr.Varun Patel, learned advocate for the petitioner, in support of the prayers would submit that section 23(c) of the Industrial Disputes Act, envisages that the workmen either cannot go on a strike or the management cannot declare a lockout in respect of matters covered by the settlement and award during the operation period of the settlement. Resorting to the provisions of Sec.24 (1) (i) of the Act, Mr.Patel, learned Senior Advocate, would submit that the same is illegal. Referring to the terms of the settlement, Mr.Patel, learned Senior Advocate would submit that the currency of the settlement entered into during the conciliation proceedings was for a period of four years from 01.09.2017 upto 31.08.2021, the settlement was binding, the workmen in accordance with the settlement could not have resorted to strike and therefore the action of the workmen on resorting to a strike on 28.09.2020 was bad. The strike was illegal and unjustified. Notices were given to the workmen in the daily newspapers asking and appealing the workmen to call off the strike and resume work lest expose themselves to disciplinary proceedings.

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3.1 Taking the Court through the draft of the undertaking at page 49, which the Company initially demanded on 29.09.2020, Mr.Patel, learned Senior Advocate, would submit that such an undertaking was justified because of the previous two spells of strike in June 2020 and August 2020 and the strike of 28.09.2020. There was nothing intimidating or increminating in the text of the undertaking. Mr.Patel, would submit that such an undertaking was in accordance with law as laid down by the Gujarat High Court in the case of Lexo Laboratories Employees Union vs. M/s. Lexo India Limited, reported in (1995) 2 GLH 680.

3.2 He would submit that even otherwise, the workmen were informed by the notice dated 07.10.2020 and through individual SMS's that the undertaking was withdrawn. The case of the Company being locked out as canvassed by the Union was frivolous and untenable. Referring to the stand of the Union in the petition challenging the order prohibiting strike, Mr.Patel, learned Senior Advocate would submit that it is not open for the Union to submit that the validity of the settlement is not referred for adjudication. He would submit that the order prohibiting strike and the challenge to that order on the ground that the validity of the settlement was not referred to adjudication, by the Union in its petition is not tenable because the Union has no locus to make a grievance against the order prohibiting strike. The demand letter dated 04.08.2020 is discounted by the learned counsel for the petitioner Company.

3.3 Mr.K.M.Patel, learned Senior Advocate would submit that it cannot be said that the settlement between the Company and the

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Workmen dated 04.08.2017 can be said to be one entered into by fraud or deceit. Taking the Court through the recitals in the settlement, Mr.Patel, learned Senior Advocate would submit that at that point of time Akhil Gujrat General Majdoor Sangh had submitted a charter of demands. The parties having failed to arrive at a settlement, the Union had approached the conciliation officer, the demands were admitted in conciliation and the settlement was arrived at during the course of conciliation proceedings under Sec.18(3) of the Act. The present Union , respondent No.4 and the petitioner of Special Civil Application No. 16326 of 2020 came into the picture only in August 2020. In fact one of the office bearers of the Union who signed the settlement one Mr.Solanki, had committed a riot and was suspended. Answering the contentions of the petition of the Union, Mr.Patel, learned Senior Advocate would submit that there is no case for making a reference of the demand of the Union for declaring the settlement as illegal and it is open for the Union to independently raise the dispute for making a reference subject to the contention of the Company that if such a dispute is raised, the workmen are required to refund the amounts which they have obtained by virtue of the settlement. The case of the workmen that the Company had declared a lockout is misconceived. Reliance was placed by the Union on the letter of the SEBI to draw contradiction between the stand of the employer today. However, Mr.Patel, would defend that statement by saying that the regulations under the SEBI required the Company to disclose the stock and there was no piling of stock and for the Company to refuse the work to the workmen on basis of the economic slow down. The stand of the respondent

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workmen, according to Mr.K.M.Patel, learned Senior Advocate, that the notice of prohibiting of strike was not served of that an opportunity of hearing be given before the order was passed, is misconceived. He would submit that the order dated 16.10.2020 was displayed on the notice board of the Company, a public notice was published in the newspaper and even otherwise, there was no breach of principles of natural justice inasmuch as, there was no duty for the State to hear the Union before passing the order. In support of this, Mr.Patel, learned Senior Advocate would rely on a decision of the Court in the case of Gujarat Rajya Kamdar Union vs. Govt. of Gujarat in Letters Patent Appeal No. 708 of 1999. He would submit that the petition of the Union be dismissed as no interference is called for in the order dated 16.10.2020.

4 Mr.Amrish Patel, learned advocate appearing for the Union in support of his submissions in Special Civil Application No. 16326 of 2020, would submit that the leaders of the Union were threatened by the Company and the Union had therefore to resort to filing FIRs before the Kadi Police Station. The terms of reference were decided Ex-parte. The Company had locked out the workmen and it was not a question when the workmen had gone on strike. He would extensively refer to the letters dated 04.08.2020 and the Minutes of the Meeting as a precursor to the notification and submit that at no stage were the Union involved in the exercise of the notification and the State was hand in gloves with the Company. There was no refusal to work as portrayed by the Company. The action of the Company in insisting for " a good behaviour bond" was unjustified

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which showed that the Company would not allow the workmen to resume the duties unless the bond was signed which was contrary to law. The terms of settlement arrived at were illegal, keeping the Company in the dark and therefore, the notification dated 16.10.2020 deserves to be quashed and set aside. He would take the Court through the definitions of "strike" and "Lockout" and suvbmit that the definition of lockout under 2(L) is read, it is apparently a case where the petitioner workmen had been locked out of the premises and it is not a situation of an illegal strike.

4.1 Mr.Amrish Patel, learned advocate, would rely on the following decisions:

(i) Jayantibhai Bhagvanji Patel vs. Rama Pulp & Papers Ltd., rendered in Letters Patent Appeal No. 350 of 2017, reported in 2019 SCC On Line 2129.

(ii) Metal Box India Ltd vs. Association of Engineering Workers Union, reported in 2001 SCC On Line Bom 429.

(iii) Haldyn Glass Limited vs. Maharashtra General, reported in 2014 SCC On Line Bom 252.

(iv) State Transport Employees Federation vs. State of Orissa & Ors., rendered in Original Jurisdiction Case No. 3220 of 1989 decided on 13.02.1990.

(v) Tata Iron & Steel Company Limited vs. State of Jharkhand & Ors., reported in (2014) 1 SCC 536.

(vi) Delhi Administration vs. Workmen of Edward Keventers & Anr., reported in (1978) 1 SCC 634.

(vii) D.D.Gears Ltd. vs. Secretary (Labour) & Ors reported in

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2006 (87) DRJ 66 (DB).

(viii) Management of the Express Newspapers (P) Ltd, Madras vs. Workers & Ors., reported in (1963) 3 SCR 540, AIR 1969 SC 569.

(ix) National Engineering Industries Ltd vs. State of Rajasthan & Ors., reported in (2000) 1 SCC 371

(x) Adamji M. Badri vs. Government Labour Officer, reported in 1980 SCC On Line Guj 79.

5 Having heard the learned counsels for the respective parties, and having perused the Notification dated 16.10.2020 and the file notings extensively referred to by the learned counsels for the respective parties to support their submissions, that of the Company as argued by the Senior Advocate Shri K.M.Patel and that of the workmen Shri Amrish Patel, what is indicative of the file notings is that at the request of the Company, the Asstt. Comm. of Labour, Mehsana, together with the Dy.Commissioner and the Addl. Commissioner, visited the premises and conducted spot visits on 28.09.2020, 29.09.2020, 02.10.2020, 05.10.2020 and 09.10.2020. Reading of the proceedings referred to in the petition would indicate that a spot visit and the report indicated that it was found that the workmen were not being prevented by the company officials. That the Company workers were not being prevented from reporting for duty. In fact, it was found that none of the workers were reverting for being obstructed from entering the premises of the Company. The report so signed by the Officers of the Government machinery would indicate that in light of this, the stand of the Union that the Company had declared a lockout, tantamouns to a submission which

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can be rightly branded as frivolous and untenable. The stand of the petitioner-Union to challenge the Notification dated 16.10.2020 is therefore nothing but a petition filed to come out of the consequences of the notification declaring the strike as illegal. The submission of the learned Senior Advocate Shri Patel, for the Company that it is not open for the Union to challenge the terms of settlement which was entered into under Sec.18 during the course of conciliation proceedings is a submission which has to be accepted.

6 Reading the report produced by both the parties which was obtained under the Right to Information Act, would indicate that there was no refusal by the Company to prevent the workmen from coming inside. The stand of the Union therefore for a declaration that the notification be declared invalid is misconceived. That brings us to the next question of the extensive exchange of notices between the Company and the workmen. True it is, that the earlier stand of the Company was to call for an undertaking from the workmen. Reading of the text of the undertaking would indicate that it was not a case where the undertaking would be said to be incriminating or intimidating. It was a plain and simple bond that the workmen were required to signed of good behaviour in order to resume work. The question of law as rightly submitted by Senior Advocate Shri K. M.Patel has been decided by this Court in the decision in the case of Lexo Laboratories (supra). In fact, by virtue of an amendmemnt to the petition, a notice dated 11.12.2020 (Annexure- "FFF") indicates that the requirement of giving such an undertaking was withdrawn.

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7 Challenge to the order prohibiting strike at the hands of the Union disputing the validity of the settlement being not referred to in the demands is also misconceived. The stand of the Union therefore, agitating and making out a case for a lockout is also bad. What is evident from the Minutes of the Meeting and the settlement that the settlement was arrived at for a period of four years during the currency of the settlement an insentive scheme was framed, one of the official of the present Union was a signatory to the settlement. The settlement therefore was arrived at and during the course of conciliation proceedings and it is therefore not open for the Union now to contend that the settlement was arrived at by way of a fraud or a deciet. The Union, the petitioner of Special Civil Application No. 16326 of 2020 came into the scene post the settlement in August 2020 and therefore, the stand of the Union when the settlement currency was about to end, is an attempt to tinkle with the peace in the Company premises and to pollute the industrial atmosphere. The contention raised by Mr.Amrish Patel, learned counsel for the Union that the demand of the Union for declaring the settlement as illegal should have been part of the reference is misconceived. As rightly submitted by the learned Senior Advocate Mr.K.M.Patel, it is open for the Union to independently raise the dispute for making a reference. Of course, it is subject to the contention of the Company that if such a dispute is raised, the workmen are required to refund the benefits taken under the settlement as a condition precedent. The stand of the Union by referring to the communications addressed to SEBI are also misconceived in light of regulation 30 r/w. Part B item 6, Schedule (iii) of SEBI (Listing Obligations & Disclosure

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Requirement Regulations), 2015.

8 Before I conclude, it is apt to reproduce the order passed by this Court in Special Civil Application No. 15907 of 2020 dated 21.12.2020 which, broke the ice at the intervention of the Court and the workmen resumed their work. The order reads as under:

"1. Heard learned Senior Advocate Mr. K.M. Patel assisted by learned advocate Mr. Varun Patel for the petitionercompany, learned advocate Mr. Amrish Patel for respondent no.4 and learned Assistant Government Pleader Mr. Bhargav Pandya for the respondentState.

2. This Court passed the following order on 11.12.2020 :

"Heard learned Senior Advocate Mr. K.M. Patel assisted by learned advocate Mr. Varun K. Patel for the petitioner and learned Assistant Government Pleader Ms. Dhwani Tripathi for the respondentState through video conference. Learned advocate Mr. Varun Patel has tendered the draft amendment. The same shall be allowed in terms of the draft. To be carriedout forthwith. Learned Senior Advocate Mr. K.M. Patel makes a statement at bar that the petitionercompany was always ready and willing and is insisting the workers to resume the duty by ending the strike, which is continued since, 28th September, 2020. He further submitted that the State Government has also passed an order dated 16th October, 2020 at AnnexureB, whereby the strike is prohibited by exercising the power under Section 10(3) of the Industrial Disputes Act, 1947. Considering the above submissions, issue Notice returnable on 18th December, 2020. Registry is directed to provide a copy of writ of this order to the learned advocate for the petitioner through email so as to enable him to serve the same upon the respondent/s through Email. Direct service is permitted."

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3. On 18.12.2020, learned advocate Mr. Amrish Patel appeared for respondent no.4 -labour union and the following order was passed by this Court :

"Heard learned Senior Advocate Mr. K.M. Patel assisted by learned advocate Mr. Varun K. Patel for the petitioner and learned advocate Mr. Amrish Patel for the respondent no.4 through video conference. Learned advocate Mr. Amrish Patel states that he has instructions to appear for respondent no.4 and prays for time to take instructions in the matter. He further states that the respondent no.4 has also preferred Special Civil Application No. 16326 of 2020 challenging the order passed by the Government prohibiting the strike. Stand over to 21st December, 2020."

4. Today when the matter is taken up, it was submitted by learned Senior Advocate Mr. K.M.Patel as well as learned advocate Mr. Amrish Patel that without prejudice to the rights and contentions of both the sides, the workers of the factory of the petitionercompany shall resume to their work on 22 nd December,2020 in their respective shifts in which they were working on 26.9.2020.

5. After deliberation with both the sides, with a view to ensure smooth functioning of the factory of the petitioner- company and to protect the interest of the workers simultaneously, the consensus is arrived at between both the sides on the following terms :

i) The petitioner company shall revoke the suspension order of the following eight workers:

1. Devnath Singh

2. Baldevji Chanduji Thakor

3. Ranjitbhai Doluji Thakor

4. Sandipkumar Babubhai Prajapati

5. Iswarbhai Punjabhai Patel

6. Soubhagya Brundaban Jena

7. Digvijaysinh Kamleshkumar Solanki

8. Jagdip Vaghela

ii) With regard to the following five workers, the suspension order will continue, on the condition that they will

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be paid 100% subsistence allowance hereafter till the next date of hearing by the petitioner company:

1. Lalbha Jasvantsinh Zala

2. Kanukumar Chavda

3. Sanjaysinh Ranjitsinh Dabhi

4. Vyomeshkumar Pravinbhai Patel

5. Hitendrabhai Natvarlal Vaghela

iii) With regard to the following two workers whose services are terminated, the petitionercompany shall pay the amount equivalent to one month's salary within a period of two days, without prejudice to the rights and contentions of either side and without considering the same as a precedent:

1. Anil Patel

2. Pravin Solanki

iv) It is agreed between the parties i.e. the petitioner- company and respondent no.4 that respondent no.4 on behalf of the workers of the petitionercompany shall file an undertaking before this Court within a period of three days i.e. 24.12.2020 to the following effect :

a) That the workers of the factory of petitioner -

company shall continue to work as they were working prior to 26.9.2020 giving normal production peacefully.

b) The workers of the factory of the petitioner -

company shall not cause any hindrance in smooth functioning of the petitionercompany and shall create an atmosphere of harmony and peace with the management of the petitionercompany.

c) The workers of the petitionercompany shall not resort to any agitation or any stoppage of work without the permission of this Court.

v) It is also agreed between both the parties i.e. the petitionercompany and respondent no.4 that the petitioner- company shall file an undertaking before this Court within a period of three days i.e. 24.12.2020 to the following effect:

a) The petitionercompany shall not initiate any proceedings against any of the workers for any cause till the next date of hearing without the

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permission of this Court.

b) The petitionercompany shall not proceed with the criminal complaints filed against the workers as well as externment proceedings filed against the respective workers till the next date of hearing.

6. In view of the above consensus arrived at between the parties, the ad interim arrangement shall continue till the next date of hearing in order to ascertain that the working of the factory of the petitionercompany is restored to normal and to end the stalemate between both the petitionercompany and its workers and such arrangement will be reviewed by the Court on the reports from the petitionercompany as well as respondent no.4 to be filed before the next date of hearing.

7. In order to see that the petitionercompany and respondent no.4 give true and correct report of the affairs of the further functioning between the parties as agreed upon, the responsible officer from the office of respondent no.3 Assistant Commissioner of Labour, Mehsana is directed to remain present in the factory premises of the petitionercompany for a period of three days from tomorrow i.e. 22 nd December,2020 and shall report about the functioning of the factory of the petitionercompany with regard to working of the workers before the next date of hearing.

8. Learned Assistant Government Pleader Mr. Bhargav Pandya who appears for respondent no.1 to 3 shall communicate this order to the respondent no.3 .

9. Learned Assistant Government Pleader Mr. Bhargav Pandya states that the respondent nos 1 to 3 shall not proceed with the criminal complaints and externment proceedings filed against the workers of the petitionercompany till the next date of hearing.

10. At this stage, learned advocate Mr. Amrish Patel states that about 200 to 300 workers of the petitioner- company have gone to their native place and they may take time to resume the duty. On a query put by the Court, it was submitted by learned advocate Mr. Amrish Patel that

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atleast 7 to 10 days time be given to such workers to resume the duty. Accordingly, a list of persons who have gone to their native place shall be provided by respondent no.4 to the petitionercompany within a period of three days and rest of the workers of the petitioner company shall join the duty tomorrow i.e. 22.12.2020 in the respective shifts in which they were working on 26.9.2020.

11. In view of the above fact situation and the consensus arrived at between both the parties, let this matter be heard along with Special Civil Application No.16326/2020 filed by respondent no.4 Union on 5 th January, 2021."

9 In light of the aforesaid positive development that was brought out due to the intervention of the Court, the prayers of the Company in its petition for a direction that action be taken to initiate proceedings under the relevant sections referred to hereinabove against the office bearers of the Union would not survive. However, it cannot be said that the exercise undertaken by the State in issuing the Notification dated 16.10.2020 can be said to be bad. The reasons therefore have been extensively considered by this Court as above.

10 Accordingly, as far as Special Civil Application No. 15907 of 2020 is concerned, in view of the order referred to hereinabove passed by this Court on 21.12.2020 no further orders need be passed and the petition is accordingly disposed of. However, in light of the reasonings mentioned in this judgement Special Civil Application No. 16326 of 2020 would stand dismissed.

(BIREN VAISHNAV, J) BIMAL