The President Sugar Mills ... vs M/S N.S.L. Sugars (Tungabhadra) ...
2023 Latest Caselaw 806 Kant

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 IN THE HIGH COURT OF KARNATAKA AT BENGALURU

       DATED THIS THE 12TH DAY OF JANUARY 2023

                       PRESENT

        THE HON'BLE MR. JUSTICE ALOK ARADHE

                         AND

     THE HON'BLE MR.JUSTICE S. VISHWAJITH SHETTY

            W.A. No.6340 OF 2012 (GM-RES)
BETWEEN:

THE PRESIDENT
SUGAR MILLS EMPLOYEES UNION
AND GSSK OFFICIALS AND
EMPLOYEES ASSOCIATION
(A REGISTERED TRADE UNION
UNDER THE INDIAN TRADE UNIONS ACT)
REPRESENTED BY ITS PRESIDENT
GAURIBIDNAUR 561 208
CHIKKABALLAPUR DISTRICT-561 208.
                                          ... APPELLANT

(BY MR. K. SUBBA RAO, SR. COUNSEL FOR
    MR. SATHEESH K.N. ADV.,)

AND:

1.     M/S. N.S.L. SUGARS (TUNGABHADRA) LTD.
       FORMERLY KNOWN AS SIRGUPPA
       SUGARS AND CHEMICALS LTD.,
       GAURIBIDANUR
       CHIKKABALLAPUR DISTRICT 561 209.

       PRESENT ADDRESS:
       M/S. NSL SUGARS (TUNGABHADRA) LTD.,
       DESANUR VILLAGE 583 140
       SIRGUPPA TALUK, BELLARY DISTRICT
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     HAVING ITS REGISTERED OFFICE
     AT NO 60/1, 2ND CROSS
     RESIDENCY ROAD, BANGALORE
     REP BY ITS DIRECTOR
     SRI Y S.V. KRISHNARAO.

2.   THE DEPUTY LABOUR COMMISSIONER AND
     RECOVERY OFFICER DIVISON 2
     LABOUR DEPARTMENT
     KARMIKA BHAVAN
     BANNERGHATTA ROAD
     BANGALORE 560 020.

3.   THE DEPUTY COMMISSONER
     CHIKBALLAPUR DISTRICT
     CHICKBALLAPUR 560 028.

4.   SRI H V RAJAN
     DIRECTOR, GSSK OFFICIALS
     AND EMPLOYEES ASSOCIATION,
     AND WORKERS UNION
     RESIDING AT NO 5/1
     DHEERESHKA NILAYA , IST MAIN I CROSS
     SIDDARTHA EXTENSION
     VIVEKANANDANAGAR , KATHRIGUPPE MAIN ROAD
     BANGALORE 560 085.

5.   SRI G.A. CHANDRA
     VICE PRESIDENT
     GAURI SUGARS EMPLOYEES ASSOCIAITON
     ANJANAPPA BUILDINGS
     OPP CANARA BANK, MADHUGIRI ROAD
     GAURIBIDANUR 561 208
     CHIKBALLAPUR DISTRICT .
                                  ... RESPONDENTS

(BY MR. LAXMI NARAYANA, AGA FOR R2 & R3
    MR. SOMASHEKAR, ADV., FOR
    MR. S.N. MURTHY, ADV., FOR R1
  MR. V.S. NAIK, ADV., FOR R5)
 V/O DTD:11.02.2013 R4 DELETED)
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    THIS WRIT APPEAL IS FILED U/S 4 OF THE
KARNATAKA HIGH COURT ACT PRAYING TO SET ASIDE THE
ORDER PASSED IN THE WRIT PETITION NO.25119/2011,
WP.NO.40521/2011(GM-RES), 44349/2011 AND 18022/2010
DATED 28/06/2012.

    THIS W.A. COMING ON FOR HEARING, THIS DAY,
ALOK ARADHE J., DELIVERED THE FOLLOWING:

                           JUDGMENT

This intra court appeal has been filed against order

dated 28.06.2012 passed by learned Single Judge in

W.P.No.40521/2011 and W.P.No.25119/2011, by which

writ petitions preferred by respondent No.1 have been

disposed of and the order passed by the Deputy Labour

Commissioner dated 30.04.2011 has been kept in

abeyance until dispute in I.D.No.155/2011 stands

concluded. The Industrial tribunal has been directed to

expedite the dispute.

2. Facts giving rise to filing of the appeal briefly

stated are that a sugar factory was run by a Coperative

Society viz., Gowribidanur Sahakari Sakkre Karkhane

(hereinafter referred to as 'GSSK' for short). In the

aforesaid factory sugar and rectified spirit was being

manufactured. GSSK had availed loans and incurred

heavy losses. Thereupon, the Registrar of the Cooperative

Society by an order dated 12.09.1986 appointed a

liquidator under Section 73(1) of the Karnataka

Cooperative Societies Act, 1959 (hereinafter referred to as

'the Act' for short).

3. The liquidator in order to realize the assets of

GSSK and to pay the dues, invited tenders for sale of

sugar factory along with distillery. In response to the

tender notification, one Siruguppa Sugars and Chemicals

Limited (SSCL) had submitted the tender. A sale deed was

executed on 18.06.1988 in favour of SSCL for a

consideration of Rs.5,04,11,111/-.

4. In April 2001, 600 workmen were employed in

the factory. The management of SSCL closed the sugar

factory with effect from 14.04.2001 without obtaining

permission under Section 25-O of the Industrial Disputes

Act, 1947 (hereinafter referred to as 'the 1947 Act' for

short). The commissioner of labour issued a recovery

certificate dated 01.08.2001 for recovery of dues of

Rs.51,56,746/- being the salary of the workmen for the

period from 16.04.2001 till 31.07.2001. The

Commissioner of Labour thereafter issued recovery

certificates dated 04.06.2002 for a sum of

Rs.1,67,15,989/- as well as a recovery certificate dated

20.11.2002 for a sum of Rs.2,25,64,751/-, towards the

wages of workmen for a period from 01.01.1998 to

31.08.2001 and from 01.08.2002 till 30.09.2002

respectively. Thereafter, another recovery certificate dated

21.07.2003 was issued for an amount of Rs.1,68,54,074/-

towards wages of the workmen for a period from

01.10.2001 till 15.07.2003.

5. A settlement was arrived at between the

management and the workmen on 02.04.2008. One

Sri.C.S.Mohan representing himself as the President of

GSSK officers and employees association filed an

application before the Assistant Labour Commissioner

and sought to raise an industrial dispute stating that the

settlement dated 02.04.2008 is illegal and unjust. The

aforesaid application was rejected by the State

Government by an order dated 25.09.2009. The said order

was challenged by aforesaid Sri.C.S.Mohan in a writ

petition viz., W.P.No.33702/2009. The learned Single

Judge of this court by an order dated 11.02.2011 set aside

the order dated 25.09.2009 and remitted the matter to the

State Government for reconsideration.

6. The Deputy Labour Commissioner had issued

a recovery certificate dated 30.04.2011 under Section 33

(c)(i) of the Act for an amount of Rs.11,53,27,575/- for

arrears of wages of workmen fro a period from 14.07.2003

till 12.10.2010. The aforesaid recovery certificate was

challenged by the management in a writ petition viz.,

W.P.No.25119/2011. The management in another writ

petition viz., W.P.No.40521/2011 challenged the order

dated 29.09.2011 passed by the Deputy Commissioner,

Chikkaballpura. The learned Single Judge by a common

order dated 28.06.2012 inter alia held that since,

I.D.No.155/2011 is pending before the Industrial

Tribunal, the recovery certificates shall be kept in

abeyance till dispute in I.D.No.155/2011 is concluded.

7. The liquidator challenged the order dated

28.06.2012 passed by learned Single Judge in

W.A.No.8116, 8405, 8407/2012 and W.A.No.6370/2012.

In the aforesaid appeals, the management filed an affidavit

of undertaking on 25.03.2013, stating that in case,

possession of the factory is handed over to it, the

management shall not alienate the assets of GSSK till the

disposal of I.D.NO.155/2011 pending before the Industrial

tribunal. The management further undertook not to create

any third party rights without permission of the State

Government. A division bench of this court vide order

dated 25.03.2013 disposed of the aforesaid writ appeals

directing the management to adhere to the terms of the

undertaking.

8. Being aggrieved by order dated 18.06.2012

passed in W.P.No.25119/2011 and W.P.No.40521/2011,

this intra court appeal has been filed by Sugar Mills

Employees Union.

9. Learned Senior counsel for the appellant

submitted that in view of law laid down by Hon'ble

Supreme Court in 'M/S OSWAL AGRO FURANE LTD. AND

ANR. VS. OSWAL AGRO FURANE WORKERS UNION AND

ORS.', AIR 2005 SC 555 as well as a division bench

judgment of this court dated 12.12.2011 in

W.A.No.3779/2005 (BINNY LIMITED V.S THE GENERAL

SECRETARY AND OTHERS), that since, he provisions of

Sections 25-N and 25-O were not complied with, the

Settlement dated 02.04.2008 arrived at between the

Management and workmen was ab initio void. It is also

contended that recovery certificates have already been

upheld by this court in writ petitions and the orders

passed by learned Single Judge have already been upheld

by a division bench of this court. It is contended that the

management has violated the provisions of Chapter VA of

the Act and therefore, the sanction for prosecution has

been granted, which has also been upheld by this court.

10. On the other hand, learned Senior counsel for

the management has invited the attention of this court to

order dated 04.11.2017 passed by the Industrial Tribunal.

It is further pointed out that against the said order, a writ

petition was filed, which was allowed by a learned Single

Judge vide order dated 19.08.2021. It is also pointed out

that the aforesaid order has been upheld in appeal vide

judgment dated 06.04.2022 in W.A.No.1147/2021. It is

therefore, contended that in view of the aforesaid order,

only a formal order is required to be passed by the

Industrial Tribunal and therefore, no interference with the

order passed by learned Single Judge is called for in this

appeal.

11. We have considered the rival submissions

made on both sides and have perused the record. Several

recovery certificates dated 01.08.2001, 04.06.2002,

20.11.2002 and 21.07.2003 were issued by the Deputy

Labour Commissioner. Thereafter, a settlement was

arrived at between the parties on 02.04.2008. Under the

aforesaid settlement, a sum of Rs.5,53,27,614/- was paid

to 379 workmen.

12. At the instance of the President of Sugar Mills

Employees Union, the dispute by an order dated

05.05.2011 passed by the State Government was referred

for adjudication to the State Government. The terms of

reference read as under:

(i) Whether C.S.Mohan establishes the allegation

that the management has illegally obtained the signatures

from all the employees for the settlement.

(ii) Whether the management establishes that the

settlement entered into with the employees is not illegal.

The Industrial Tribunal by an order dated

04.11.2017 held that 379 workmen who have already

received the compensation from the management are not

entitled to prosecute the reference. However, liberty was

reserved to 188 workmen to implement the recovery

certificate.

13. The aforesaid order passed by the Industrial

Tribunal was assailed in a writ petition before the learned

Single Judge. The learned Single Judge by an order dated

19.08.2021 has set aside the order dated 04.11.2017

passed by the Industrial Tribunal. The aforesaid order

passed by the learned Single Judge was upheld in

W.A.No.1147/2021 by a division bench of this court.

Therefore, at this point of time, only a formal order is

required to be passed by the Industrial Tribunal. It is also

pertinent to note that admittedly 397 workmen who have

received the benefit under the settlement dated

02.04.2008 have not deposited the amount. Even

otherwise the issue with regard to validity of settlement

arrived at between the parties as the validity of recovery

certificates does not arise for consideration in this appeal.

Therefore, the majority of workmen cannot be permitted to

contend that the settlement is void as they have enjoyed

the benefit of the settlement.

For the aforementioned reasons, the order passed by

learned Single Judge does not call for any interference in

this appeal.

In the result, the appeal fails and is hereby

dismissed.

Sd/-

JUDGE

Sd/-

JUDGE

SS