Gujarat High Court
Bhimnath R Yadav vs Trivedi Crafts Pvt Ltd on 16 April, 2024
Author: Biren Vaishnav
Bench: Biren Vaishnav
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C/LPA/196/2023 ORDER DATED: 16/04/2024
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IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
R/LETTERS PATENT APPEAL NO. 196 of 2023
In
R/SPECIAL CIVIL APPLICATION NO. 9410 of 2013
With
CIVIL APPLICATION (FOR STAY) NO. 2 of 2022
In
R/LETTERS PATENT APPEAL NO. 196 of 2023
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BHIMNATH R YADAV & ORS.
Versus
TRIVEDI CRAFTS PVT LTD & ANR.
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Appearance:
MR YOGEN N PANDYA(5766) for the Appellant(s) No. 1,2,3,3.1,3.2,4,5,6
MR DG SHUKLA & MS MESHWA BHATT for the Respondent(s) No. 1
NOTICE SERVED for the Respondent(s) No. 2
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CORAM:HONOURABLE MR. JUSTICE BIREN VAISHNAV
and
HONOURABLE MR. JUSTICE PRANAV TRIVEDI
Date : 16/04/2024
ORAL ORDER
(PER : HONURABLE MR. JUSTICE PRANAV TRIVEDI)
1. The present appeal filed under Clause 15 of the Letters
Patent assails correctness and validity of the judgment and order
dated 23.08.2022 passed by the learned Single Judge in Special
Civil Application No. 9410 of 2013.
2. The prayers made in the writ petition preferred by the
respondent no. 1 - original petitioner is to quash and set aside the
award dated 08.01.2013 passed by the labour court in Reference
(LCA) Demand No. 19 of 1998, whereby the labour court had
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partly allowed the reference and directed reinstatement of six
workmen on their original posts with continuity of service and 15%
backwages.
3. The learned Single Judge after hearing both the parties,
came to the conclusion that award dated 08.01.2013 passed by the
labour court in Reference (LCA) Demand No. 91 of 1998 was bad
in law and is required to be quashed and set aside. In such context
the writ petition was allowed. The said order is assailed in the
present appeal.
4. The factual matrix which led to the filing of the petition is
that the appellants - members of original respondent no. 1 - Union
were employed by the respondent no.1 - original petitioner -
company. The petitioner company had employed 93 employees of
the Union in different categories. Due to economic measures and
with a view to reduce cost and expenses the Company decided to
reorganise its operations and business. In such factual
background, the company decided to retrench all the 51 helpers
including the present appellants who were working as helpers.
Pursuant thereto, notice came to be issued on the notice board of
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the Company and thereby, the appellants who were represented
by the Union refused to accept the retrenchment orders as well as
retrenchment dues that were proposed to be paid by the Company.
4.1. In the background of such factual scenario, the Union raised
an industrial dispute as regards termination of 51 workers from
the service. The said dispute came to be referred to the labour
court which culminated into Reference (LCA) Demand Notice No.
19 of 1998. Respondent Union represented 51 helpers and
submitted its statement of claim and the petitioner - company
submitted its written statement, and the respective parties also led
documentary as well as oral evidence before the labour court.
During the pendency of the reference, 45 helpers arrived at a
settlement and six helpers who are appellants herein refused for
settlement and went ahead with the reference. The labour court
vide award dated 08.01.2013 issued direction to reinstate six
workmen on their original posts with continuity of service and 15%
backwages and rejected the reference qua other workmen who
had settled the dispute. Thus, the labour court partly allowed the
reference and directed to reinstate six helpers. Aggrieved by the
said award dated 08.01.2013, petitioner - company preferred writ
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petition before this Court. The learned Single Judge after
considering various provisions of the Industrial Disputes Act came
to the conclusion that the labour court has erroneously interpreted
the provisions of Section 25F of the Industrial Disputes Act and
Rule 80B of the Industrial Disputes (Gujarat) Rules, 1966 and
therefore, the award is required to be quashed and set aside.
Against the said observations which are impugned in the order
passed by the learned Single Judge, the appellants - original
members of Union preferred the present appeal.
5. We have heard Mr. Yogen Pandya, learned advocate
appearing for the appellant and Mr. D.G. Shukla, learned
advocates appearing for respondent no.1.
6. Learned advocate Mr. Pandya appearing on behalf of the
appellant has contended that interpretation of the labour court
with regard to provisions of Section 25F of the Industrial Disputes
Act (hereinafter referred to as the "Act") read with Rule 80-B of
the Industrial Disputes (Gujarat) Rules, 1966 (for short the
"Rules") was just and proper. However, the learned Single Judge
has wrongly interpreted it. Taking us through the said provisions,
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learned advocate Mr. Pandya has contended that the respondent -
original petitioner Company ought to have given notice prior to
the retrenchment and by not doing so, they had clearly breached
the provisions of the Act. It is further contended by learned
advocate Mr. Pandya that the appellants were earning their
livelihood in the respondent Company and therefore, such
retrenchment was not permissible and as such, the learned Single
Judge has not taken the said aspect into consideration. Therefore,
the order passed by the learned Single Judge is required to be
quashed and set aside.
7. On the other hand, Mr. Shukla, learned advocate appearing
for respondent no.1 has contended that the learned Single Judge
has correctly interpreted the provisions of the Section 25F of the
Act read with Rule 80-B of the Rules and in particular, sub-clause
(ii) of Rule 80-B of the Rules and has submitted that the Company
had followed the procedure while retrenching the concerned
workmen. Thus, the order passed by the learned Single Judge is
just and proper.
8. To understand the controversy involved in the present
proceedings, it is necessary to go through the procedure adopted
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by the company and the applicability of the Rule 80-B of the Rules.
It is not in dispute that the respondent company decided to
retrench the workers as the number of workers were more than
necessary and the Company was going through reconstitution. In
such context, notice was given on 10.01.1998 by the respondent -
Company to the workers who were retrenched. Moreover, on the
very same date, the respondent company as required under the
provisions of Section 25F of the Act offered one month's wages in
lieu of notice of retrenchment compensation by way of Banker's
cheque to all the workers who were retrenched. Therefore, the
core question would be whether the Company had followed due
procedure of law during the act of retrenchment. Therefore, the
issue involved in the reference as well as before the learned Single
Judge was only whether proper procedure is followed as per Rule
80B of the Rules. For ready reference, Section 25F of the Act as
well as Rule 80-B of the Rules are reproduced hereunder :-
"25F. Conditions precedent to retrenchment of workmen.--No
workman employed in any industry who has been in continuous
service for not less than one year under an employer shall be
retrenched by that employer until--
(a) the workman has been given one month's notice in writing
indicating the reasons for retrenchment and the period of notice has
expired, or the workman has been paid in lieu of such notice, wages
for the period of the notice;
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1* * * * *
(b) the workman has been paid, at the time of retrenchment,
compensation which shall be equivalent to fifteen days' average pay
2[for every completed year of continuous service] or any part
thereof in excess of six months; and
(c) notice in the prescribed manner is served on the appropriate
Government 3[or such authority as may be specified by the
appropriate Government by notification in the Official Gazette].
80-B Notice of Retrenchment.
(I) The notice referred to in clause (c ) of Sec.25F shall be given in
Form XXIV by an employer and be served either by personal service
or by registered post, on the [Secretary to the Government of
Gujarat, Education and Labour Department Ahmedabad] :
(i) not less than twenty-one-days before the date or
retrenchment, if the notice of retrenchment has been given to
a workman;
(ii) within seven days of the date of retrenchment, if no
such notice has been given but the workman is paid
wages in lieu of notice;
(iii) (a) at least one month before the date of termination of
service, if such date is specified in an agreement where the
retrenchment is carried out under an agreement; and
(b) on the date of such agreement, where the date of
termination is not so specified.
[(2) A copy of such notice shall be sent by employer to the
Commissioner of Labour, Ahmedabad and the Deputy Commissioner
of Labour, Ahmedabad.]"
8.1. On going through the provisions of Section 25F of the Act
read with Rule 80-B of the Rules, sub-clause (ii) of clause (I) of
Rule 80-B of the Rules clearly indicates that the employer has to
serve notice within seven days of the date of retrenchment, if no
such notice has been given, but the workmen has been paid
wages in lieu of notice. In the instant case, as can be observed the
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workers were paid wages in lieu of notice on the same day i.e. on
10.01.1998 and notice in that aspect was also issued on
10.01.1998. Therefore, the labour court was not justified in
observing that the notice has to be given seven days prior to
retrenching the workers. Further, as per the provisions of Rule 80-
B of the Rules, notice has to be given in a prescribed format i.e.
Form No. XXIV which can be perused from the documents on
record that such notice was given timely in the prescribed form
i.e. Form No. XXIV as per the provisions of Rule 80-B of the Rules.
Thus, the contention of learned advocate Mr. Shukla that the
Company has taken care of all the procedural aspect and has
complied with the procedure as laid down in Rule 80B of the
Rules, is required to be accepted. The learned Single Judge has
considered the said aspect and has categorically observed in
paragraphs 14 and 15 which read as under :-
"14. In the opinion of the Court, steps taken by the petitioner-
Company is in consonance with the requirement of Rule-80-B of the
Industrial Disputes (Gujarat) Rules, 1966, which provides for notice
for retrenchment requires notice of not less than 21 days before the
date of retrenchment, if the notice of retrenchment has been given
to the respondent-workmen. However, where no notice has been
given, but the respondent-workmen are paid wages in lieu of notice,
then within 7 days of the date of retrenchment, intimation is
required to be given in prescribed form to the appropriate
Authorities. In the instant case, from the record it appears that the
petitioner-Company has confirmed with the timeline prescribed
under the Act and the Rules. However, the Labour Court has
proceeded to observe, erroneously though, that in the facts of the
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present petition, the petitioner-Company was required to serve
notice 7 days in advance to the appropriate Government from the
date of retrenchment, whereas the requirement is to serve notice
upon the appropriate Government within 7 days of the date of
retrenchment.
15. In view of the aforesaid, the Court is of the view that the
retrenchment procedure as prescribed, has been complied with by
the petitioner- Company and therefore, impugned award, which has
proceeded only on the ground that requirement of Section-25F of
the Industrial Disputes Act, 1947 and Rule-80-B of the Industrial
Disputes (Gujarat) Rules, 1966 are not complied with, is required to
be interfered with and set aside."
9. In view of the aforesaid, the reasoning given by the learned
Single Judge is just and proper and we see no infirmity in the
order passed by the learned Single Judge. Therefore, the appeal
being meritless, the same is required to be rejected. Hence, the
appeal is rejected summarily.
Consequently, the connected civil application for stay also
stands disposed of.
(BIREN VAISHNAV, J)
(PRANAV TRIVEDI,J)
phalguni
