The State Of Karnataka vs Workmen Of Mysore Lamp Works Ltd
2021 Latest Caselaw 1562 Kant

                          1



     IN THE HIGH COURT OF KARNATAKA AT BENGALURU

      DATED THIS THE 10TH DAY OF FEBRUARY 2021

                      PRESENT

         THE HON'BLE MR. JUSTICE ALOK ARADHE

                        AND

     THE HON'BLE MR.JUSTICE NATARAJ RANGASWAMY

            W.A. NO.16925 OF 2011 (L-RES)
                         IN
            W.P. NO.3190 OF 2002 (L-RES)

BETWEEN:

THE STATE OF KARNATAKA
REP BY THE SECRETARY TO GOVT.
DEPARTMENT OF INDUSTRIES & COMMERCE
M.S. BUILDINGS, DR. B.R. AMBEDKAR ROAD
BANGALORE-560001.
                                         ... APPELLANT
(BY SRI. DHYAN CHINNAPPA, AAG)

AND:

1.     WORKMEN OF MYSORE LAMP WORKS LTD,
       REPRESENTED BY THE MYSORE LAMP
       STAFF & EMPLOYEES UNION (REGD.)
       (A REGISTERED TRADE UNION
       REGISTERED UNDER THE INDIAN
       TRADE UNIONS ACT)
       REP. BY ITS PRESIDENT
       HAVING ITS OFFICE AT OLD
       TUMKUR ROAD, MALLESHWARAM WEST
       BANGALORE-560055.

2.     THE MYSORE LAMP WORKS LIMITED
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     REP. BY THE MANAGING DIRECTOR
     OLD TUMKUR ROAD
     MALLESHWARAM WEST
     BANGALORE-560055.
                                         ... RESPONDENTS
(BY SRI. K. SUBBA RAO, SR. COUNSEL FOR
    M/S. SUBBA RAO & CO., FOR R1
    SRI. UDAYA HOLLA, SR. COUNSEL FOR
    SMT. ANUPARNA BORDOLOI, ADV., FOR R2)

                         ---
     THIS W.A. IS FILED U/S 4 OF THE KARNATAKA HIGH
COURT ACT, PRAYING TO, SET ASIDE THE ORDER PASSED
IN THE WRIT PETITION NOS.3190/2002 (L-RES) C/W W.P.
NOS.8259/2002, 37142/2002 AND 757/2003 (L-RES) DATE
14.01.2011.


     THIS W.A. HAVING BEEN HEARD AND RESERVED ON
08.02.2021    FOR   HEARING      AND   COMING   ON    FOR
PRONOUNCEMENT       OF    JUDGMENT,    THIS   DAY,   ALOK
ARADHE J., DELIVERED THE FOLLOWING:


                         JUDGMENT

This intra court appeal under Section 4 of the

Karnataka High Court Act, 1961 has been filed by the

Government of Karnataka being aggrieved, by the order

dated 14.01.2011 passed by learned Single Judge in

W.P.No.3190/2002 and other connected matters by

which learned Single Judge has quashed the orders

dated 04.01.2002 as well as 30.08.2002, by which

Mysore Lamp Works Ltd. (hereinafter referred to as 'the

Company' for short) by which operation of the company

was closed by the State Government and subsequently

an order was passed by the Labour Department under

Section 25-O of the Industrial Disputes Act, 1947

(hereinafter referred to as 'the Act' for short) granting

permission to close the company under Section 25-O(2)

read with Section 25-O(8) of the Act.

2. Brief facts necessary for adjudication of this

appeal are that the company is a public sector

undertaking. In the year 1992-93, the company was

operating on profitable basis. However, since, 1993-94,

the company started incurring losses. On 11.07.1996,

the State Government decided to prioritize the company.

The company in the month of December 1996 was

registered with Board of Industries and Financial

Reconstruction (hereinafter referred to as 'the BIFR' for

short). The BIFR by order dated 18.08.1998 reiterated

its decision to prioritize the company. A proposal for

rehabilitation of the company submitted before the BIFR

was rejected and on 18.07.2000, order of winding up of

the company was passed by the BIFR. The Company

petition viz., COP No.231/2000 was filed before this

court. The company preferred an appeal before the

Appellate Authority for Industrial and Financial

Reconstruction (hereinafter referred to as 'the Appellate

Authority' for short). The Appellate Authority confirmed

the order of winding up. Thereafter, the State

Government by an order dated 04.01.2002 closed the

operation of the company. Subsequently, an order was

passed by the Labour Department under Section 25-O of

the Industrial Disputes Act, 1947 (hereinafter referred to

as 'the Act' for short) granting permission to close the

company under Section 25-O(2) read with Section 25-

O(8) of the Act. The aforesaid orders were subject

matter of challenge before the learned Single Judge. The

learned Single Judge vide order dated 14.01.2011

allowed the writ petitions and the matter was remitted

to the Government for fresh consideration of the

application under Section 25-O of the Act after affording

reasonable opportunity to the workmen of the company

to put forth their case and thereafter to consider the

case of the workmen in the light of observations made in

the order. In the aforesaid factual background, this

appeal has been filed.

3. During the pendency of this appeal, a bench

of this court vide order dated 08.12.2016 passed in

O.S.A.No.36/2014 in view of consensus arrived at

between the parties, directed the Additional Chief

Secretary to the Government, Commerce and Industries

Department to ensure that the M/s Mysore Minerals Ltd.

shall convene a meeting of Board Of Directors as per

decision dated 07.12.2006 for the absorption of the

workmen within two weeks and further directed to

identify the places where the services of the workmen of

the company are to be absorbed in M/s Mysore Minerals

Ltd. and the details shall be produced on the next date

of hearing. It was further directed that each of the

workmen shall be paid a sum of Rs.1,25,000/- subject

to proper identification. Admittedly, in pursuance of the

order passed by a bench of this court, a sum of

Rs.1,25,000/- has been paid to the workmen who had

filed the writ petition.

4. Thereafter, by an order dated 13.11.2020, a

bench of this court directed Karnataka Minerals to make

adhoc payment of Rs.15,000/- per month to the

workmen for past three years within a period of four

weeks from the date of passing of the order. However,

the aforesaid payment was made subject to result of the

appeal and the orders that may be passed on the

merger by the appropriate government and also subject

to future adjustment that can be made.

5. Learned Senior counsel for the workmen of

the company submitted that pursuant to the order

passed by State Government on 01.12.2020, the

company had filed a memo dated 02.01.2021, along

with which the report of the Task Force, which was

constituted to arrive at appropriate notional pay fixation

and arrears of the workmen of the company was placed

on record. It is further pointed out that the aforesaid

Task Force has made the recommendations in favour of

the workmen, which are yet to be implemented.

6. However, it is contended that the aforesaid

Committee has not taken into account the fact that the

workmen are entitled to back wages for a period from

2003 till the date of their absorption i.e., in the year

2017. It is further submitted that the Committee has not

taken into account the past services rendered by the

workmen in the company and the issue with regard to

fitment, pay scale and promotion and seniority as well

as consequential benefits. In this connection, our

attention has been invited to statement of revised wages

from 1994 to 2019 as per the settlement between the

Management and the Workers Union in respect of

Mysore Electrical Industries, Karnataka Soaps and

Detergents Ltd. It is submitted that the workmen who

are approximately 55 in number are also entitled to

parity in treatment and are entitled to arrears of wages

as well as consequential benefits at par with Mysore

Electrical Industries, Karnataka Soaps and Detergents

Ltd. In support of aforesaid submissions, reliance has

been placed on decision of the Supreme Court in

'B.K.MOHAPATRA VS. STATE OF ORISSA AND

ANOTHER', 1987 (SUPP) SCC 553, 'S.M.PANDIT

AND OTHERS VS. STATE OF GUJARAT AND

OTHERS', (1972) 4 SCC 778 and in 'HARJINDER

SINGH VS. PUNJAB STATE WAREHOUSING

CORPORATION', (2010) 3 SCC 192. Learned Senior

counsel has also reminded us of our constitutional

obligation while reading out paragraphs from the

decision from 'HARJINDER SINGH VS. PUNJAB

STATE WAREHOUSING CORPORATION supra.

7. On the other hand, learned Additional

Advocate General submitted that notwithstanding the

order passed by the State Government on 01.12.2020,

still the validity of the order passed by the learned

Single Judge needs to be adjudicated to ascertain the

date of closure of the company. It is also contended that

provisions of Section 25-O does not contemplate

recording of evidence and in the instant case, neither

the workmen had adduced any evidence in its case nor

had sought for an opportunity to cross-examine the

witnesses. Therefore, the learned Single Judge erred in

law in setting aside the order of closure on the ground

that the workmen were not afforded an opportunity of

cross-examination. In support of aforesaid submissions,

reliance has been placed on decision of Bombay High

Court in 'BRITANNIA INDUSTRIES LTD. VS.

MAHARASHTRA GNERAL KAMGAR UNION AND

ANOTHER', (2009) 3 LLJ 275. However, learned

Additional Advocate General fairly submitted that the

recommendations made by Task Force Committee shall

be given effect to within a period of three months and

the amount due to the workmen approximately to the

tune of Rs.6 Crores, who are before this court shall be

paid to them within a period of three months.

8. Learned Senior Counsel for the company

submitted that the company had already announced VRS

scheme on 31.12.2001 prior to 04.01.2002 and 1046

employees had already opted for the scheme and the

company had closed its production on October 2002

itself. It is also pointed out that services of 48

employees have already been absorbed in Boards and

Corporations where they were deputed by the company

and services of 79 employees have been absorbed in

Karnataka Mineral Corporation Ltd. Therefore, in the fact

situation of the case, the Government rightly took a

decision to close the company. It is also submitted that

the learned Single Judge erred in setting aside the order

dated 04.01.2002 and in remitting the matter to the

State Government for fresh consideration.

9. Learned Senior counsel for the Karnataka

Mineral Corporation Ltd. has invited our attention to

paragraph 16 of the constitution bench decision of the

Supreme Court in 'ANAKAPALLE CO-OPERATIVE

AGRICULTURAL AND INDUTRIES SOCIETY LTD VS.

WORKMEN AND OTHERS, AIR 1963 SC 1489 and

submitted that the constitution bench of the Supreme

Court has laid down the principles with regard to

retrenchment with regard to Section 25-FF of the Act

and the workmen are either entitled to compensation or

absorption and they cannot claim both the reliefs.

However, it is submitted that the Corporation shall

implement the recommendation of the Task Force

Committee within a period of three months and shall

grant the benefits to the workmen due under the

recommendations within a period of three months from

today.

10. We have considered the submissions made

by learned counsel for the parties and have perused the

record. It is well settled in law that this court while

passing the order may take into account the subsequent

events. In this connection, reference may be made to

decision of the Supreme Court in ANDHRA BANK VS.

OFFICIAL LIQUIDATOR AND ANOTHER, (2005) 5

SCC 75. However, it is well equally well settled

proposition in law that the court should not answer the

academic or hypothetical question. [See: SANJEEV

COKE MANUFACTURING COMPANY VS. M/S

BHARAT COKING COAL LIMITED AND ANOTHER,

(1983) 1 SCC 147]. Now we may advert to the

subsequent developments, which have taken place

during the pendency of this appeal. The State

Government during the pendency of this writ appeal

took a conscious decision by an order dated 01.12.2020,

which reads as under:

GOVERNMENT ORDER NO:CI 108 CMI 2020 (E), BENGALURU, DATED 01.12.2020

In the circumstances explained in the preamble, Government is pleased to accord approval for utilization of land assets of M/s Mysore Lamp Works Ltd. (MLWL) for Experience Bengaluru Project as below:

(i) To develop Experience Bengaluru Project on the land assets of MLQWL as a novel concept showcasing both the culture of Karnataka but also maintaining lung space in the heart of the city as per the National Green Tribunal Act.

(ii) Withdrawal of Government Order dated 20.03.2020 according approval to the Scheme of Amalgamation of the Mysore Lamp Works Limited with Karnataka State Minerals Corporation Limited and empowering Mysore Lamp Works Limited to implement Experience Bengaluru Project by making necessary changes in the Memorandum of Association and Article of Association.

(iii) BDA to consider for change of land use from industrial to public and semi public of MLWL land to suit the proposed Experience Bengaluru Project.

(iv) In principal approval to initiate process of buy out minority shareholders of 5.6% and settle liabilities and make the MLWL to 100% Government Shareholding Company.

The above approval is accorded subject to the following terms and conditions:

(1) A detailed valuation of the company is to be done after the change in nature of the company and after the change in nature of ht eland. The value of each share is then assessed and shared with GoK.

(b) The liability with respect to employees will continue to be the responsibility of the KSMCL as decided in the previous amalgamation order.

(c) MLWL board decision is taken as mandated by the companies act wherever necessary.

(d) Hon'ble High Court is briefed of the new developments before hand since a case is still pending in the court with respect to employees issue.

(e) Since majority of the employees are already absorbed in KSMCL, they will continue to work there and employees' issues with respect to fitment, payment of arrears, etc will be handled by KSMCL.

(f) On the liabilities (primarily Government debts and some dues towards Government companies etc.) - since MLW will continue to be in existence, the liabilities need not be retired as of now. A decision on this can be taken at a later date.

This order is issued with the concurrence of Finance Dept. vide its Note No. FD 320 Exp-1/2020 dated 25.11.2020; Commerce and Industries Department (Mines) vide File No. CI 108 CMI 2020 (P2) (E) dated 26.11.2020 & Urban Development Department vide File No .CI 108 CMI 2020 (P3) (E) and Cabinet approval in its meeting held on 27.11.2020 vide subject No.C:612/2020.

By Order and in the name of the Governor of Karnataka Sd/-

Under Secretary (C &C) Commerce & Industries Department.

11. Thus, from perusal of the aforesaid

Government Order, it is evident that the Government

has taken a conscious decision to approve for utilization

of the land assets of the company for experience

Bengaluru Project and has withdrawn the Government

Order dated 20.03.2020 according approval to the

scheme of amalgamation of Company with Karnataka

State Minerals Corporation Limited and empowering the

company to implement experience Bengaluru Project by

making necessary changes in its Memorandum of

Association and Articles of Association. In Principal

approval has also been accorded to initiate the process

of buy out minority shareholders of 5.6% and settle

liabilities and make the company to a 100% government

share holding company and the aforesaid decisions have

been taken subject to the terms and conditions, which

have been mentioned in the order.

12. Thus, it is axiomatic that the company is still

in existence, therefore, in view of the subsequent

development viz., the conscious decision taken by the

State Government, it is not necessary for us to

adjudicate the validity of the order passed by the

learned Single Judge as the issue with regard to validity

of the order of closure has been rendered academic as

the State Government has subsequently taken a

conscious decision to permit the company to be in

existence and has converted the same as 100%

Government Company. It is relevant to mention here

that pursuant to interim order dated 08.12.2016 passed

by a bench of this court directing absorption of the

employees of the company, the State Government had

constituted the special task force committee. The

committee has made a representation in favour of the

workmen, which is reproduced below for the facility of

reference:

(i) The Task Force is of the unanimous view that the pay scales fixed by KSMCL AND MLWL employees on absorption is better than the notional pay worked out with MLWL pay scales. Hence, the fixed by KSMCL on absorption of MLWL employees is appropriate and reasonable.

(ii) Monetary relief may be provided to MLWL employees from 12.06.2003 to the date of absorption in KSMCL or the date of death or the date of superannuation as per the Scheme of Financial Relief already approved vide Government Order No.CI/14/CMC/2019, dated 20.03.2020 and retained in the Government Order No.CI/108/CMI/2020(E), dated 1.12.2020.

(iii) The above may be submitted before the Hon'ble Court by MLWL AND KSMCL through their senior counsels.

13. Learned Additional Advocate General as well

as learned Senior counsel for Karnataka Mineral

Corporation Ltd. have fairly stated that the

recommendations made by the Task Force Committee

shall be given effect to within three months. The

aforesaid statement is placed on record. It is not in

dispute that services of the workmen who are before us

have been absorbed in the year 2017 in Karnataka

Mineral Corporation Ltd. and they are in service and in

the peculiar facts of the case, bearing in mind the

interest of the workmen as well who have been litigating

before this court for past approximately two decades, we

deem it appropriate to mould the relief and to direct the

State Government as well as Karnataka Mineral

Corporation Ltd. to ensure that the benefits of the

recommendation made by the Task Force Committee are

given effect to and the payment of amount of

approximately Rs.6 Crores as stated by learned

Additional Advocate General shall be paid to the

workmen within a period of three months from today

who are before us in the light of recommendations made

by the Task Force Committee subject to proper

identification. However, we may hasten to add that we

have not quantified the amount due to the workmen.

14. This court is conscious of its constitutional

obligation, it is trite law that case is an authority for

what it decides and not for what logically follows from it.

The ratio decidendi of the case has to be read in the

factual context. It is pertinent to note that in none of the

cases relied upon by the learned Senior counsel for the

workmen, the Supreme Court was dealing with the

matter arising out of an order of winding up or closure of

a company. Therefore, the decisions relied upon by the

learned Senior counsel for the workmen have no

application to the fact situation of the case. The court

while deciding a controversy has to bear in mind the

scope of the proceeding as well and jurisdiction of this

court in this appeal is confined to examining the validity

of the order passed by the learned Single Judge and this

court is not oblivious of its constitutional obligations,

which can only be discharged in an appropriate

proceeding.

15. The grievance of the workmen with regard to

their fitment, fixation of pay scales and grant of

consequential benefits cannot be gone into in this appeal

as the same requires adjudication of the facts, which can

be done in an appropriate forum. Apart from this, the

aforesaid adjudication would be outside the scope of the

present proceeding, therefore, we refrain ourselves from

entering into the arena of disputed questions of fact,

which can only be adjudicated in an appropriate forum.

Therefore, the workmen would be at liberty to take

recourse to such remedy, which may be available to

them in accordance with law. All questions in this regard

are kept open to be adjudicated in an appropriate forum.

It is trite law that life of an interim order is co-terminus

with the main proceeding, therefore, the interim orders

dated 08.12.2016 as well as 20.02.2020 do not survive

in view of the fact that order dated 08.12.2016 has

already been implemented and controversy in this

appeal has already been adjudicated.

With the aforesaid directions, the appeal is

disposed of.

Sd/-

JUDGE

Sd/-

JUDGE

SS