Bhailalbhai S.Darji vs Guajrat State Co-Op. Marketing ...
2023 Latest Caselaw 868 Guj

    C/LPA/262/2017                                   CAV JUDGMENT DATED: 03/02/2023




              IN THE HIGH COURT OF GUJARAT AT AHMEDABAD

                     R/LETTERS PATENT APPEAL NO. 262 of 2017

              In R/SPECIAL CIVIL APPLICATION NO. 15580 of 2005


FOR APPROVAL AND SIGNATURE:


HONOURABLE MS. JUSTICE SONIA GOKANI

and
HONOURABLE MS. JUSTICE GITA GOPI
==========================================================

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 ?

========================================================== BHAILALBHAI S.DARJI & 23 other(s) Versus GUAJRAT STATE CO-OP. MARKETING FEDERATION LIMITED & 1 other(s) ========================================================== Appearance:

MR TR MISHRA(483) for the Appellant(s) No. 1,10,11,12,13,13.1,13.2,13.3,14,15,16,17,18,19,2,20,21,22,23,24,3,4,5,6,7,8,

MR GM JOSHI SR.ADV.(370) for the Respondent(s) No. 2 MR RH RUPARELIYA(6212) for the Respondent(s) No. 1 MS.NEHA R RUPARELIYA(6361) for the Respondent(s) No. 1 ==========================================================

CORAM:HONOURABLE MS. JUSTICE SONIA GOKANI and HONOURABLE MS. JUSTICE GITA GOPI

Date : 03/02/2023

CAV JUDGMENT

C/LPA/262/2017 CAV JUDGMENT DATED: 03/02/2023

(PER : HONOURABLE MS. JUSTICE SONIA GOKANI)

1 Appellants have filed Special Civil Application No.

15580 of 2005 praying to quash and set aside the

award and declare the same to be contrary to law

and further seeking directions against respondent

No.1 to give effect to the earlier award within one

month. The matter came up before the learned

Single Judge (Coram:K.M. Thaker, J.) and the same

was admitted and finally heard on 19.01.2016

where the petition was partly allowed and direction

was given to grant the benefit upto 58 years of age.

2 The case of the appellant was that the Industrial

Employment (Standing Order) Act, 1946 ("the

Industrial Act" for short) provided the age of

retirement as 60 years and the Company used to

retire its employees at the age of 55 years. There

was a settlement between the Union operating in the

establishment and the management of the Company

and it was agreed that the age of the retirement

would be 58 years.

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3 The appellants challenged the settlement on the

ground that the Industrial Act provided the age of

retirement as 60 years. There cannot be a

settlement giving lesser benefit than what was

provided under the Industrial Act.

4 The petition was finally heard and the Court

accepted the age of retirement as 58 years as per

the settlement, which operated between the Union

and the establishment.

5 After the receipt of order and judgement, the

appellants preferred Miscellaneous Civil Application

No. 2026 of 2016 making a grievance that the

appellants have retired at the age of 55 years and

after the judgement, the only difference is of gratuity

amount from 55 years to 58 years, which have been

paid and not the wages for the period of three years.

The Review Application was rejected on 12.08.2016.

6 Aggrieved appellants are before this Court

challenging the judgement and order on the ground

that there cannot be a settlement giving lesser

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benefit than what has been provided under the

Industrial Act. Model Standing Order applicable to

the industrial employees in Gujarat provides for

retirement at the age of 60 years and, therefore, any

agreement or stipulation in terms of employment

giving lesser benefit is illegal and deserves to be

quashed.

7 Learned Single Judge erred in not granting wages

from 55 years to 58 years although the age of 58

years is accepted. If the appellant continued in

service upto 58 years, they would be entitled to the

wages till then. The difference of gratuity amount

had been paid by the respondent, but the wages for

three years were not made available and, hence, the

request is made to direct the respondent to pay full

wages along with the interest to the appellant upto

58 years and the appeal be allowed accordingly.

8 This Court has heard Mr. T.R. Mishra, learned

advocate for the appellants and Mr. G.M. Joshi,

learned Senior Advocate appearing with Mr. R.H.

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Rupareliya, learned advocate for the respondents.

9 The detailed submissions made by both the sides

may not be necessary to be reproduced. Suffice to

note that adhering to their pleadings made before

the learned Single Judge in Special Civil Application

No. 15680 of 2016, both the sides have argued

vehemently.

10 On having heard both the sides, firstly the decision

of the learned Single Judge in Special Civil

Application No. 15580 of 2005 shall need to be

regarded, where the petitioners prayed thus:

"14(A) calling for Record and Proceedings of the Reference (IT) No.127/2003 from the Industrial Tribunal, Ahmedabad.

(B) Setting aside the Award at Annexure-A dated 01.11.2004 and declaring the same to be contrary to law, illegal, null and void and further directing the respondent No.1 to give effect to earlier Award at Annexure-C within one month:

(C) directing the respondent no.1 employer to pay all the arrears of wages including P.F. and gratuity with 12% interest within a period of four weeks."

11 The Court, after extensively taking note of the record

and the submissions as well as the provisions of

law, partly modified the award of 01.11.2004.

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12 The Union had raised the demand for enhancement

of the age of superannuation for the employees of

Gujarat State Cooperative Marketing Federation-

respondent No.1 herein from prevailing age of 55

years to 60 years.

13 The Union had entered into the settlement on

25.03.2004 and it was agreed upon between the

Union and the establishment that the age of the

employee would be enhanced from 55 years to 58

years and the revision shall be effective from

01.03.2004.

14 The said settlement was placed before the Tribunal

for consideration which was found to be just and

fair and accordingly, the award was passed by the

Tribunal on 01.11.2004.

15 It was averred by the petitioners before the learned

Single Judge that by entering into the settlement,

interest of petitioners has been compromised by the

Union, as the age of superannuation would not be

less than what has been prescribed by the

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Industrial Act. Again, it was the grievance that those

petitioners, who were entitled for the revised age of

superannuation would be deprived of the benefit of

award passed by the Tribunal, whereby the demand

was accepted and in view of the relevant date

mentioned in the settlement, they would be further

deprived of revised pay in terms of the settlement.

Reliance was also placed on the decision of Western

India Match Co. Ltd. v. Workmen, AIR 1973 SC

2650 .

16 Mr. Gautam Joshi, learned Senior Advocate for

respondent No.2, had urged that the Union

represented entire set of employees and after the

reference was remanded for fresh consideration,

negotiations and deliberations took place and,

eventually, the settlement had been arrived at as per

the provisions of section 2(p) and section 18 of the

Industrial Disputes Act, 1947, which is binding on

all the employees and no one would have a right to

oppose the same. It was also further urged that the

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settlement was placed before the Tribunal for proper

examination and the same had been found to be

just and fair and, hence, the award passed in terms

of the reference need no interference. For

respondent No.2 also the stand taken was that the

age of superannuation was revised as agreed upon

by both the sides and it was the mutual interest of

all concerned that the terms and conditions to

revise the age of superannuation by enhancing the

age from 55 to 58 years had been accepted.

17 We notice that respondent had challenged the award

by preferring Special Civil Application No. 1197 of

2004 and when the said writ petition was pending,

the Union and the employer had entered into the

settlement in respect of the age of superannuation.

This was placed on record in Special Civil

Application No. 1197 of 2004, where all the present

appellants sought permission to be impleaded as

party respondents, which was allowed and they

were impleaded as parties to the said proceedings

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and they opposed the settlement. After taking into

consideration their objections, the petition was

disposed of, where the Court held that the

settlement arrived at was under section 2(p) read

with section 18(3) of the Industrial Disputes Act

between the Federation and the Union to raise the

dispute before the Tribunal on the question of

fixation of age of retirement and, therefore, the

award passed by the Tribunal deserved to be set

aside and the matter was required to be remanded

to the Tribunal for reconsideration in view of the

settlement dated 25.03.2004 as well as in view of

the objections raised by the learned counsel

appearing for concerned applicants. In view of the

objections raised by the appellants, the Union had

agreed to fix the age of retirement at 58 years and in

that context, the Tribunal was directed to reconsider

the matter for passing the award in terms of

settlement. Accordingly, the reference was

remanded for reconsideration and the Tribunal re-

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examined the matter in light of the order passed in

Special Civil Application No. 1197 of 2004 and upon

re-examination, it came to the conclusion that the

settlement between the respondents No.1 and 2 is

just and fair and deserved to be accepted and the

age of superannuation shall be 58 years with effect

from 01.03.2004 and the terms and conditions in

the settlement would apply to such revision.

18 Respondent No.2 being the Union, it represented all

employees of respondent No.1, which included the

present appellants who were in employment and, as

the demand was raised by the Union in Reference

(I.T.) No.127 of 2003. In other words, the appellants

were in employment and members of respondent

No.2 Union, which negotiated with respondent No.1.

The terms of agreement, which were reduced in

writing are held to be the outcome of collective

bargaining. The Court, therefore, held that the

settlement arrived at in accordance with section 18

read with section 2(p) of the Industrial Disputes Act

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would be binding to respondent No.1 as well to all

the employee. Respondent No.1 undertaking and

respondent No.2 Union accepted the revision and

enhancement in respect of the age of

superannuation to 58 years from 55 years from

01.03.2004.

19 The grievance of the present appellants is that the

demand was referred for adjudication in May, 2003

when they were in service. However, respondent

No.1 undertaking made them to retire on their

completing 55 years of age by invoking the

provisions related to the age of superannuation

prevalent at the relevant point of time and,

therefore, when the award dated 20.12.2003 was

passed, they had already retired on completion of

the age of superannuation and, hence, their interest

was not protected either by the Union or the

undertaking and, therefore, they should be entitled

to the benefit of settlement. They also insisted on

the age of superannuation to be 60 years.

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20 Learned Single Judge adjudicated the issue of

award being made effective not from 01.03.2004 but

from 22.05.2003 by holding thus:

"14. Ordinarily, in industrial adjudication, more particularly in cases where the dispute is related to revision in age for superannuation, if the learned Tribunal accepts, wholly or partly, the demand of the workmen, then, the learned Tribunal would grant the benefit either from the date of order of reference or from the date of award, but with appropriate modification and appropriate directions. The third option before the learned Tribunal would be to grant the benefit from the date of demand which would be followed in few cases where strong case for justification to grant the benefit with retrospective effect i.e. from the date of demand is made out. Ordinarily, except in rare cases, it would not be proper to grant idle wages and other benefits to the employees without having actually served the undertaking for the interregnum. Therefore, normally the Court would not grant such demand with retrospective effect i.e. from the date of demand.

21 With regard to heart burning in relation to

prescribing the date of effectiveness of the award

and selecting 01.03.2004 as the date, the Court did

not find any rational for selecting the said date and

to that extent the award passed by the learned

Tribunal is held to have suffered from error or non-

application of mind. Relevant paragraphs are

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reproduced hereunder:

"19. Having regard to the facts and circumstances of the case, this Court is of the view that the grievance and heart burning of the petitioners (and few other workmen) deserve to be resolved, more so when it is possible without affecting interest of other workmen. So as to achieve the said goal, the date of order of reference (i.e. the date when the demand came to be referred for adjudication) ought to be accepted as relevant and effective date for implementation of the substantive provision under the settlement i.e. the terms related to age for superannuation and the said terms and conditions ought to be made effective from the date of the order of reference. If such - and so much - modification is made in the award interest of all stakeholders will be protected - even of the employer. Therefore, following order is passed:-

[a] The award dated 1.11.2004 is hereby partly modified and the relevant and effective date for the purpose of implementation of the terms and settlement dated 25.3.2004 is revised to 22.5.2003, i.e. the date when the demand was referred for adjudication to the learned Tribunal. Consequently, the date mentioned in paragraph No.3 of the settlement (i.e. 1.3.2004) shall stand deleted and will be substituted by the date 22.5.2003. The other terms and conditions shall remain as it is but will be given effect by considering the relevant and effective date as 22.5.2003.

[b] It is clarified that persons who retired during the period from 22.5.2003 to 28/29.2.2004 shall be entitled for appropriate difference of payment / so far as gratuity and other retiral benefits are concerned. This Court is given to understand that during the period between May

- 2003 and April - 2004, there was no substantial revision in wages / salaries except appropriate change in the dearness allowance. Therefore, the difference of retiral benefits will be calculated by taking into account the salary which would be applicable in case of the petitioners as on the date when they completed 58 years of age and the difference of retiral benefits so calculated shall be paid to the petitioners within period of six weeks from the date of service of certified copy of this order.

[c] It is further clarified that the persons who have already

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accepted the settlement and the benefits flowing from the settlement shall not be entitled for benefit of this order."

22 We are in complete agreement with the learned

Single Judge on this aspect.

23 With regard to the contention in relation to the

Model Standing Orders prescribed under the

Industrial Act on insistence for superannuation to

be 60 years, the learned Single Judge has concluded

that the contention raised would not assist the

cause of the appellants in light of the provisions

under the Model Standing orders, more particularly,

in view of Clause 27 itself, which provides that the

employer and the workmen can, by virtue of

settlement or the award, determine any other age

for superannuation.

23.1 Relevant paragraphs are profitably reproduced

hereunder:

"16.1 So as to appreciate and consider the said contention, it is relevant to take into account provision under clause 27 of the Bombay Industrial Employment (Standing Orders) Rules, 1959 framed under the Industrial Employment (Standing Orders) Act, 1947. The said clause 27 reads thus:-

"27. The age for retirement or superannuation of the

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workman may be sixty years or such other age as may be agreed upon between the employer and the workmen by any agreement, settlement or award, which may be binding on the employer and the workmen under any law for the time being in force."

16.2 It can be seen from the said provision that it does provide that the age for superannuation of the workman " may" be 60 years. However, the said provision further provides that the employer and the workman may, however, agree to any other age, by an agreement, settlement or award.

16.3 Thus, the provision under the Model Standing Order contemplates a situation where the workman and the employer can settle any age other than 60 years as the date for superannuation.

16.4 So as to support his contention based on the provision under the Model Standing Orders, learned advocate for the petitioners relied on the decision in case of Western India Match Co. Ltd. v. Workmen [AIR 1973 SC 2650]. In the said decision, the case of an individual employee was involved in the dispute and that too with regard to service condition in his appointment letter which prescribed special period of probation, which was not completely in consonance with the provision under the standing orders related to the subject of probation. In the said decision, Hon'ble Apex Court did not examine the contention in light of or based on provision under Model Standing Orders in background of a settlement with union representing all employees in the undertaking and in the said case, Hon'ble Apex Court did not consider the matter in light of the fact that the settlement with such majority union was arrived at under the provisions of Section 2(p) and 18(3) of the Act. Thus, the said decision does not render any assistance to the contention raised by the workman.

16.5 In present case, the age related to superannuation is determined by process of collective bargaining and it is determined by virtue of a settlement under Section 2(p) read with Section 18(3) of the Act which is arrived at with the union which represents all employees of the respondent No.1 undertaking. Even present petitioners were members of the said union.

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17. Besides this, it also cannot be overlooked that the settlement is in operation since last 12 years and until now, the settlement is not terminated by the workmen / union. Moreover, during past about 12 years, several employees must have retired in accordance with the provision under the said settlement in terms of which the learned Tribunal has passed the award dated 1.11.2004.

17.1 At the same time, it is also relevant to take into account the fact that when large number of workmen in an undertaking have accepted the settlement as just and fair, then, objection by microscopic minority would not be relevant or such objection cannot be allowed to frustrate the will and desire of the large majority. In present case, it is not in dispute that almost 95% to 98% of total number of workmen accepted the settlement and the objection was raised only by present 24 persons or few more workmen."

24 We are in complete agreement with the learned

Single Judge, who in its lucid and extensively well

considered judgement has taken note of all aspects.

There does not appear to be any reason for this

Court to interfere. Learned Single Judge has rightly

modified the award by changing the relevant and

effective date for the purpose of implementation from

01.03.2004 to 22.05.2003, the date when the

demand was referred for adjudication to the

Tribunal, where by substituting the said date to

22.05.2003, the Court had also given benefits to all

those, who retired from 22.05.2003 to 28.02.2004.

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In relation to the gratuity and other retiral benefits,

by taking into consideration that there was no

substantial revision in wages between May, 2003 to

April, 2004 and the direction for calculating the

salary also is given.

25 The decision being legal and rational, there would be

no requirement for any interference.

26 We also notice that Miscellaneous Civil Application

No. (for clarification) No.2026 of 2016 was preferred

by respondent No.1 for recalculating the retiral

benefits paid to the employees at the time of

retirement by taking into account the revised salary

as would be applicable on 29.02.2004 instead of

22.05.2003. However, the Court did not pay the

wages for the period from the date when the

appellants attained the age of 55 years to the date

when they attained the age of 58 years. Therefore, by

way of clarification, the request had been made to

direct the respondent to calculate the three years of

wages from 55 years to 58 years and pay the same

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for the appellants. Learned Judge did not consider

such a request of making the payment of wages for

these three years, since the settlement did not speak

of the payment of wages to the employees or

beneficiaries of settlement dated 25.03.2004. The

age of superannuation was determined at 58 years.

According to Clause 3 of the settlement, the benefit

was extended to the employees, who retired on

01.03.2004 and the employees who retired after

01.03.2004. The Court did not chose to grant these

three years of wages in Miscellaneous Applications,

since the judgement did not contain the same. It left

it open for the applicants present appellants to seek

the same in fresh collateral proceedings. In absence

of any ambiguity in the directions given in the

judgements, it chose not to entertain the application

for clarification.

27 Before this Court, much emphasis is laid on grant of

these three years of wages/pay for the appellants,

who were already made to retire at the age of 55

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years. Admittedly, when the reference was made and

the demand was referred for adjudication to the

Tribunal in May, 2003 the present appellants were

in service with respondent No.1 undertaking. While

the matter was pending for adjudication, they were

made to retire when they completed 55 years of age,

since that was the age of superannuation prevailing

at the relevant point of time and the award came to

be passed on 20.12.2003 when the settlement was

arrived at and by then they had already retired on

completion of age of superannuation.

28 It is also noteworthy that the learned Single Judge

was not satisfied with the rational for effective date

for the purpose of settlement to be on 01.05.2004,

instead, it has changed the same to 22.05.2003

when all the appellants were already in service. They

were also permitted to be party in Special Civil

Application No. 1197 of 2004. They were permitted

to be impleaded as respondents in the proceedings

and the Court had deemed it appropriate to remand

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the matter to the Tribunal for considering the

settlement, which had been arrived at by quashing

and setting aside the award dated 20.12.2003 in

Reference (I.T.) No.127 of 2003 with further direction

to the Tribunal to reconsider the matter in terms of

settlement entered into between the petitioner

Federation and the Union by clarifying that the

Tribunal shall give an opportunity of hearing to the

present appellants applicants of Civil Application

No. 2652, 2564, 1985 and 2006 of 2004 and it

would be open for the Tribunal to decide the

question regarding the binding effect of settlement

as to whether the settlement is just and fair and a

consequential order on the basis of the same was

also to be considered. Noticing the factum of they

being entertained at the time when the Court

quashed and set aside the award of the Tribunal in

Special Civil Application No. 1197 of 2004,

protecting the interest of the appellants as the

beneficiaries of the award coupled with the fact that

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they were also permitted to be heard in fresh

consideration by the Tribunal, their interest was well

protected.

29 The age of superannuation had been raised from 55

years to 58 years and as these appellants , since

were made to retire at the age of 55 years, they

requested for the benefit of wages for the period of

three years, as they could not serve respondent No.1

undertaking because the decision of the Tribunal

came on 01.11.2004. Not only the petitioners were

in service when the demand was raised from the

date when they attained 58 years of age, the fact

remains that the settlement which had been

accepted by the Court never contemplated the wages

for the period of three years from their attaining the

age of 55 years of age to the age of 58 years.

30 Even while giving them the benefit of gratuity and

other retiral benefits with no change having been

made in terms of settlement, nor having the Court

modified or altered or substituted the terms of

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settlement, the learned Single Judge chose not to

give such benefits of wages for the period of three

years to these 24 persons.

31 To that extent the major challenge had remained.

The clarification application also was made

demanding the wages of these three years. This

Court must not be oblivious of the fact that the

settlement was arrived at between the Union and the

establishment and, as part of the collective

bargaining, it was decided to raise the age of

superannuation from 55 years to 58 years. Both the

parties chose not to follow the age of 60 years as

given under the Model Standing Order, but the same

had been settled at 58 years. The Tribunal, while

accepting this settlement, had also accepted the date

of reference on which it was made effective. The

slight modification was made by the Court by

changing the date and making it effective from

22.05.2003.

32 The learned Single Judge has already taken care of

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the retiral benefits of those also, who retired earlier in wake of this settlement. However, when their wages of three years are not forming part of the settlement, the same could not be insisted upon by the parties concerned. Moreover, they never worked for all these three years and have already settled their dues with the establishment. It is a circumstance, which may not be quite favourable to these appellants, since their date of retirement had come at the age of 55 years as otherwise, they would have been entitled to continue for the period of three years further in their retirement benefit. When the entire period upto 58 years is already taken into consideration including the gratuity, in our opinion, no serious prejudice can be said to have been caused, which would warrant interference at the hands of this Court.

33 Resultantly, the Letters Patent Appeal requires to be dismissed.

(MS. SONIA GOKANI, J. )

(GITA GOPI,J) SUDHIR