Full Judgment Text
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PETITIONER:
M.C. MEHTA
Vs.
RESPONDENT:
UNION OF INDIA & ORS. ETC.
DATE OF JUDGMENT: 18/12/1998
BENCH:
S.SAGHIR AHMAD, & M. JAGANNADHA RAO.,
JUDGMENT:
M. JAGANNADHA RAO, J.---------------------
The dispute in this batch of T.As. is between the
Workmen and Management of M/s Birla Textile (Prog. Textiles
Ltd., Calcutta). Common question arise in all these T.As.
The I.A. 202 of 1992 (in I.A.. 22 in W.P. 4677 of 1985)
has been filed on behalf of 2800 workers of M/s. Birla
Textiles (Proprietor Textiles ltd., Calcutta) (the
"Industry") who claim to have worked for various periods
ranging from 5 to 30 years and whose services are in
jeopardy upon the closure of the industry at Delhi,
consequent to orders of the court. The reliefs sought for
in this I.A. are (i) payment of full back wages w.e.f.
1.12.1996 along with 18% interest (ii) to treat the workmen
as in continuous employment for 1.12.1996 (iii) to direct
the industry to deem that the workmen have exercised option
to shift in accordance with order of this Hon’ble Court,
(iv) to direct the industry to give 1 year’s wages as
shifting bonus (v) to direct the industry to ask the workmen
to report at the selection sites after the factory is fully
set up and commenced protection, with basic amenities for
the workers and the families.
The following are the facts: By an order dated
8.7.1996 in M.C.Mehta vs. Union of India [1996 (4) SCC 750],
this court directed closure of 168 industries including the
industry in question. Various directions were given
including the grant of incentives and benefits to industries
desiring to relocate and also for payment of various amounts
to the workmen. We are mainly concerned with directions 9(a)
to (f) issued in the above case which read as follows:-
(9) The workmen employed in the above-mentioned 168
industries shall be entitled to the rights and
benefits as indicated hereunder:
(a) The workmen shall have continuity of employment
at the new town and place where the industry is
shifted. The terms and conditions of their
employment shall not be altered to their detriment;
(b) The period between the closure of the industry
in Delhi and its restart at the place of relocation
shall be treated as active employment and the
workmen shall be paid their full wages with
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continuity of service;
(c) All those workmen who agree to shift with the
industry shall be given one year’s wages as
"shifting bonus" to help them settle at the new
location;
(d) The workmen employed in the industries which
fail to relocate and the workmen who are not willing
to shift along with the relocated industries, shall
be deemed to have been retrenched with effect from
30.11.1996 provided they have been in continuous
service (as defined in Section 25-B of the
Industries Disputes Act, 1947) for not less than one
year in the industries concerned before the said
date. They shall be paid compensation in terms of
Section 25-F(b) of the Industrial Disputes Act,
1947. These workmen shall also be paid, in addition,
one year’s wages as additional compensation;
(e) The "shifting bonus" and the compensation
payable to the workmen in terms of this judgment
shall be paid by the management before 31.12.1996.
(f) The gratuity amount payable to any workmen shall
be paid in addition."
Initially, the industry was not prepared to relocate
elsewhere and therefore, it informed this court that it
would retrench the employees and pay whatever was payable to
the workmen under the above order. But pursuant to the
suggestions of this court, the industry reconsidered the
matter and this court in its order dated 4.12.96 in M.C.
Mehta vs. Union of India [1997 (11) SCC 327] observed that
the learned counsel for the industries had accepted the
court’s suggestion to have a "fresh look" into the matter.
In the same order dated 4.12.96, this court modified the
direction 9(d) relating to payment of back wages as "six
years’ wages" instead of ’one year wages’ in case the
industry decided to close down. That would mean that in the
event of non-relocation, the workmen would have to be paid 6
years wages and not merely 1 year wages.
Subsequently, in supersession of an earlier notice
dated 28.11.96, the industry published a fresh ’notice’ on
its Notice Board that it had reconsidered the matter as per
the order of this court dated 4.12.96 and decided to
relocate the industry in Baddi, District Solan (H.P.) and
the the workmen who were willing to be relocated at the new
site ’Baddi’ should inform the management in writing by
25.12.96. If they reported, they would be entitled to
continuity, their therms and conditions would not be
altered, the period between the closure of the unit at Delhi
and its re-start at Baddi would be treated as active
employment and they would be paid full wages with continuity
of service. Further, all those workmen agreeing to shift
would get 1 year’s wages as ’shifting bonus’ to help them to
settle at Baddi. Those who were not willing to shift would
be deemed to have been retrenched w.e.f. 30.11.96, provided
they were in continuous service (as defined in Section 25-B
of the Industrial Disputes Act, 1947) for not less than one
year in this unit before the said date. They would be paid
compensation in terms of Section 25F(b) of the Industrial
Disputes Act and in addition, one year’s wages as additional
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compensation. It was further notified that the shifting
bonus to the workmen who agreed to shift and the
compensation for those unwilling to shift to ’Baddi" would
be paid before 31.12.1996, as per directions of this Court.
On 23.12.96, eight unions of workmen of this
industry sent a reply stating that the industry had violated
the order of this court as it was relocating in the State of
Himachal Pradesh rather than in the National Capital
Territory of Delhi as envisaged in the order dated 8.7.96
and that therefore it was not proper for the industry to ask
the employees to shift to the State of Himachal Pradesh. But
ignoring this reply the industry published a notice on
30.12.96 reiterating its plan to relocate in the State of
Himachal Pradesh.
At that stage, this court was approached by the
industries for modification of the order dated 8.7.96 and
for permitting relocation outside N.C.T. (Delhi). On that,
this court passed an order on 31.12.1996 permitting
relocation in Haryana, Punjab, Himachal Pradesh, Rajasthan
and Uttar Pradesh and said that if they were so relocated,
the industries would be treated on par with those industries
relocating in N.C.T. (Delhi). This order was to be treated
as a clarification of the order dated 8.7.1996.
There was some controversy that when this order was
passed in chambers on 31.12.1996, all parties were not
present. But the counsel for the industries disputed this
contention. Be that as it may, it is not necessary to go
into this dispute - particularly, when some latter
applications filed by the workmen for recalling this order
dated 8.7.96 did not fructify.
Therefore, i.e., after 31.12.96, the industry put up
a fresh notice on 4.1.1997 stating that:
"As per the directions of the Hon’ble Supreme Court,
those workmen who are willing to shift would be
entitled to receive salary/wages for December, 96
and for subsequent months, the workmen should
intimate to the management by January 7th 1997 their
willingness to shift to Baddi, upon which the
Salary/wages for December, 1996 will be disbursed to
them on 9th and 10th January, 1997."
On the same day, 4.1.1997, a further notice was put
up on the Notice Board that though the industry took steps
for payment on 29, 30, 31st December, 1996, no workmen had
come to collect the cheques. Hence, it was requested that
the workmen might come and collect the cheques.
In reply thereto, seven unions through a Joint
Action Committee issued a notice on 6.1.97 to the industry
stating that the workmen were willing to move to the State
of Himachal Pradesh. The said notice read as follows:
"That all the workman and employees of Birla
Textiles Mills hereby give their willingness for
relocation/shifting without prejudice to their
rights subject to the outcome of the review and
other proceedings being pursued by our lawyers
before this Hon’ble Supreme Court of India, against
the order dated 31.12.96 passed by the Hon’ble
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Supreme Court of India."
It is the main contention for the industry
(respondent) through its senior counsel Shri Kapil Sibal and
Shri Dipankar Gupta that the option exercised by the workmen
in the above letter agreeing to shift to Baddi was not an
unconditional one but was conditional in as much as it
stated that they were exercising the option subject to the
result of certain applications filed by them in this court
i.e. for recall of the order dated 31.12.96. According to
respondents, such a conditional option was not within the
scope of the order of this court dated 8.7.96. Further, the
counsel contended that there was no proof that the
individual workman of these unions were parties to this
reply. In fact, the status or authority of the Joint Action
Committee was not clear, according to them.
In the belief that the conditional offer was bad and
the Joint Action Committee had no locus standi to send the
reply dated 6.1.97, the industry published further notice on
8.1.97 requesting "each workmen" to give his willingness
within one week to shift in terms of the following proforma,
to be addressed to the industry:-
"Dear Sirs,
I am willing to shift to Baddi, Distt. Solan (H.P.),
when the Delhi Unit of Birla Textiles in being
relocated."
On 19.5.97, the Labour Commissioner, N.C.T. (Delhi)
directed the industry to pay the various amounts payable to
the employees. The industry put up a further notice on
20.5.97 that in view of the reply of the unions dated 6.1.97
agreeing to shift to Baddi, the industry had put up a notice
on 8.1.97 requesting the individual workman to respond in a
week. None of the workmen responded. The industry then said
that it was deeming the employees as retrenched w.e.f.
30.11.1996. This was stated in the further notice dated
20.5.97 and it reads as follows:
"We have been legally advised that those workman who
have not expressed in writing their willingness to
shift within the stipulated time as per the above
referred two notices, be deemed to have been
retrenched with effect from 30th November, 1996 as
per the order of the Hon’ble Supreme Court dated 8th
July, 1996..........."
However, the industry wanted to give one more
opportunity and issued another notice on 20.5.97 that those
who were willing to shift were to report at Baddi on or
before 7.6.1997. The said notice dated 20.5.97 stated as
follows:
"Such workmen who now give their consent to shift
are requested to report at Baddi immediately, in any
case, not later than June 7, 1997......"
The Labour Commissioner gave a notice to the
industry on 28.5.97 to conform to the directions of this
Hon’ble Court regarding payment of shifting bonus etc. On
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30.3.98, on account of the delay in the matter, this court
directed 3 months wages to be paid.
On the basis of the above facts, learned senior
counsel for the appellants Ms. Indira Jaisingh, Shri
D.K.Aggarwal and other submitted for the workmen that the
industry had violated the orders of this court, and that
there was no question of asking individual workmen to give
their options in a proforma. According to counsel, the
attitude of the industry revealed that it was bent on
retrenching the workmen and taking local employees from the
H.P. State on lesser wages inasmuch as, if the workmen of
the industry were to be continued in employment, they world
have to be paid the same wages as were being paid while at
Delhi while the minimum wages payable in H.P. to the locals
were much lower.
Shri S.B. Sanyal, learned senior counsel for the
workmen contended that as per the order of this court dated
8.7.96, there was no question of thee industry seeking the
option of the employees. Such an obligation to exercise
option would arise only after the new industry started
functioning at H.P. According to counsel, this court, in its
order dated 8.7.96 guaranteed continuity up to the date of
restart of the industry at the new location and hence the
option asked for by the industry was uncalled for and
contrary to orders of this Court.
Counsel for petitioners-workmen in I.A. No.201/97
referred to a letter written by one of the workmen Mr.
Ramakant who stated in his letter dated 23.6.97 that all the
workmen were willing to rejoin at Baddi. According to
learned counsel, this letter of the workman superseded the
offer dated 6.1.1997 made by the employee and that this
letter contained an unconditional option to move to the
State of Himachal Pradesh. According to learned counsel,
after this, the industry could not have treated the
applicants as unwilling to join at Baddi. Shri Ranjit Kumar
and other counsel also made like submissions on behalf of
the workmen.
On the other hand, Shri Kapil Sibal, learned senior
counsel for the industry, submitted that the workmen were
not entitled to give a conditional option as contained in
their letter dated 6.1.97, that the workmen having filed
review petitions etc. in this court for recalling the order
dated 31.12.96, were indeed - even on 6.1.97 - not willing
to go to Solan, H.P. and that the letter dated 6.1.97 was
not a valid option, and hence the industry rightly deemed
the employees as retrenched w.e.f. 30.11.96. Several
opportunities were given by the industry even later to these
workmen to come and join at Baddi. As the Joint Action
Committee was not a recognised entity, options had to be
called from individual workmen. According to him, out of
the total number of 2522 workmen as on 30.11.96, those who
opted to shift to Baddi, Solan within the time specified,
were only 7 workmen, that 595 workmen did not accept the
payment and 10 cheques were lying with the workmen or with
the postal authorities. In regard to the payment of 3
months salary, as directed by this court on 30.03.98, it was
stated that 1938 workmen were eligible to receive the said
amount, that 1891 persons look it and cheques of 47 workmen
were lying with the industry.
In reply to the contention of the learned senior
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counsel for the workmen that the workmen had time to join at
the new location till the industry was ready for being
"restarted", the learned senior counsel Shri Kapil Sibal and
Shri Dipankar Gupta contended that would not be a proper
interpretation of the order dated 8.7.96 because under para
9(e) of the said order the ’shifting bonus’ and the
compensation were payable before 31.12.96 and hence this
court intended that the workmen should join before 31.12.96.
They pointed out that even so, the industry extended the
time by issuing several public notices. As the workmen did
not opt to go to Baddi before 31.12.96 or by the extended
dates as per para 9(d) of the order of this court dated
8.7.96, they were rightly deemed to have been retrenched by
30.11.96 and local people of Himachal Pradesh have already
been employed.
Learned senior counsel, Shri Kapil Sibal also
referred to the conduct of the workmen which according to
him disentitled the workmen to any relief. He submitted
that before and after 6.1.97 (the date of notice of the
various unions that they were willing to shift to Baddi,
subject to the orders in pending applications). The workmen
were totally unwilling to go to Baddi. They were repeatedly
making attempts by filing review petitions to see that the
31.12.96 order permitting relocation outside N.C.T. OF
Delhi, H.P., Rajasthan, Haryana, was recalled. Shri Kapil
Sibal referred to the review petition No. 39/97 filed by
the workmen seeking review of the order dated 31.12.96
permitting the industries to shift to H.P., Rajasthan,
Haryana and Punjab outside the N.C.T. (Delhi). According
to the plea of the workmen, the court was to deem industries
which were not relocating in N.C.T. (Delhi) as "closed" in
view of the orders dated 8.7.96 and 4.12.96. Counsel
submitted that thee workmen were interested more in getting
the 6 years salary as compensation by treating the
industries as closed and as if they were not relocating.
Reference was also made to IA 52/97 filed by the Government
of N.C.T. (Delhi) for review of the order dated 31.12.96.
IA 144 was also similar. These IAs were dismissed by this
court on 16.3.98 and on other dates. Learned counsel
pointed out that even in the body of the affidavits filed in
IA No. 201, 202 and 203, where several other reliefs were
asked for, the workers urged that the industries be located
in N.C.T. (Delhi). Though some ancillary reliefs were
prayed for in these IAs, the entire lenor of the affidavits
according to Sri Sibal, was that the order dated 31.12.96
should be recalled. Counsel stated that the workmen had, in
fact physically prevented the industry from removing its
articles from Delhi to H.P., even as late as on 20.5.97.
Shri Dipankar Gupta, learned senior counsel appearing for
the respondents also made similar submissions. He also
submitted that Baddi was a well developed place with a large
number of industries and Banks etc. and all normal
facilities were available there if the workmen really
desired to shift. According to both counsel, out of 7
unions only 2 unions had filed these IAs while the other
unions remained silent. They also submitted that the
workmen ought to have helped the industry during relocation
and for that purpose, they should have shifted to Baddi even
before the industry re-started functioning at that place.
The party-in-person who appeared in CP 532 wanted
that he be paid the 6 years wages on the basis that the
industry was closing and not shifting. In other words, he
was not willing to go to Baddi. The counsel for respondents
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Shri kapil Sibal stated that a letter with cheque which was
sent to him got returned. But if the industry was relocating
and he was not shifting, he would get only 1 year wages plus
compensation under Section 25F(b) as per the order dated
8.7.1996. The industry was agreeable to pay him 1 year wages
in addition to Section 25F(b) compensation.
The points for consideration are:
(i) Whether the management was right in its submissions that
the workmen, though given opportunity in various letters to
give their option option for reporting at Baddi, failed to
exercise option and must be deemed to have been retrenched
on 30.11.96 in terms of the order dated 8.7.90 and 3.11.96
of this court?
(2) Whether the workmen were right in contending that the
management had no right to seek options from the workmen
even before the industry was relocated and started
functioning at Baddi?
These two points reflect the rival contentions and
can be disposed of together.
In our opinion, the true answer to the contentions
can be found in the order dated 8.7.96 read with the order
dated 31.12.96. We have already extracted the various
clauses in para 9 of the order of this court dated 8.7.96.
We shall briefly refer to them again. Sub-Clause (a)
emphatically says that
"the workmen shall have continuity of employment at
the new town and place where the industry is
shifted. The terms and conditions of their
employment shall not be altered to their detriment."
Sub-clause (b) is important and it says that
"The period between the closure of the industry in
Delhi and its restart at the place of relocation
shall be treated as active employment and the
workmen shall he paid their full wages with
continuity of service."
The work "continuity" and "restart" used in
sub-clauses (a) and (b) of para 9 bring about the main
intendment of the order. It is clear, from a plain reading
of these clauses that the workmen were to be treated as if
they were in service till the time the industry restarted at
the relocated place and till such time, their service were
to be treated as continuous. If that be so, there was no
question of the employer asking them for an option to agree
to shift and fix and earlier time limit than the date of
starting of the industry at Baddi.
Learned senior counsel for respondents Shri Kapil
Sibal and Shri Dipankar Gupta argued that that could not be
the true meaning of clauses (a) and (b). The crucial clause
according to them was clause (e) which stated that.
"The ’shifting bonus’ and the compensation payable
to workmen in terms of this judgment shall be paid
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by the man-agement before 31.12.96."
The ’shifting bonus’ was referred to sub-clause (c)
and the payment of compensation was referred to in clause
(d) and these amounts had to be paid by 31.12.96, as stated
in clause (e). According to learned counsel, the option to
join at Baddi must have therefore been exercised before
31.12.96. They really on Clause (d) which reads as follows:
"the workmen employed in the industries which fail
to relocate and the workmen who are not willing to
shift along with the relocated industries, shall he
deemed to have been retrenched with effect from
30.11.96....... and be paid ........ one years wages
as additional compensation."
[of course by order dated 4.12.96 in case the
industry did not relocate, they had to pay 6 years
wages and not merely wages for one year]
On the basis of clauses (c), (d) and (e), the
learned senior counsel for the respondents argue that if the
workmen did not exercise option by 31.12.96, they were to be
deemed as retrenched by 30.11.96.
In our opinion, the contention of the learned senior
counsel for the respondents is based upon a misconception of
the true import of this court’s order dated 8.7.96. As
already stated, the two clauses (a) and (b) are crucial and
deal with continuity of service of the workmen on the same
terms and conditions and the payment of full wages till the
"restart" at the new place and these conditions cannot be
altered to their detriment. The employees are to be deemed
to be in active employment right from the date of "closure"
of the industry of Delhi till its "restart" at the place of
relocation and they had to be paid their full wages with
continuity of service for the said period. There was,
therefore, no question of the industry compelling the
workmen to exercise any option before the date of such
restart informing the industry that they were prepared to
rejoin at the place where the industry was proposed to be
started. The industry could not be said to be restarted
unless and until it had got the plant installed and obtained
all necessary permissions for its being commissioned at the
new place. Till such time, the workmen were to be deemed to
be in service with continuity. In our view, the said
continuom could not be broken by the industry by
unilaterally asking the workmen to exercise an option to
join. Such an option on the part of the workmen was nowhere
contemplated by the order of this court dated 8.7.96. The
industry was nowhere given any right to seek such an option.
This court gave an option for the workmen for ’not
joining’ and not ’for joining’ at the relocated place. Till
the time of ’restart’ of the industry at the relocated
place, it was open to the workmen to say that they would not
rejoin. The only consequence is that if they exercised such
an option on any date after the date of closure and before
restart, they would still be deemed to have been retrenched
w.e.f. 30.11.96 and not with effect from the date on which
they exercised their option not to rejoin. In other words,
if they opt not to rejoin, they would not be entitled to
wages from the date of closure till the date they exercised
their option not to rejoin - inasmuch as any such refusal to
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rejoin at Baddi, communicated to the industry before the
date of restart would result in their being deemed to have
been retrenched from 30.11.1996.
The industry in our opinion, proceeded on a total
misconception of the order of this court dated 8.7.96 and
adopted a procedure which ran quite contrary to scheme which
was envisaged by this court for the benefit of the workmen.
The fact that during the period before the industry
was relocated, the workmen approached this court for recall
of the order dated 31.12.96 which order permitted relocation
of thee industry outside N.C.T. (Delhi) could not, in our
opinion, be deemed to amount to an option not to rejoin at
the proposed place of relocation. In fact the letter dated
6.1.1997 of the workmen could not be treated as a
conditional option to rejoin because they were not obligated
to give any option to rejoin but they could have, if they so
chose, opted not to rejoin. The letter dated 6.1.1997 could
not be treated as a letter exercising option not to rejoin
at the place of relocation. This is because it specifically
contained an offer to rejoin. The fact that the workmen
subjected their intention to rejoin to orders of this court
did not convert an intention to join into an intention not
to join at the relocated place. Further, the right of any
party to seek review of orders of this court is a right
which is lawfully exercised and cannot be treated as a
breach of the order of this court dated 8.7.1996.
For the aforesaid reasons, we reject the contention
of the respondents. We accordingly direct the industry to
allow all the workmen except those who exercised or would
exercise an option not to rejoin - to rejoin at Baddi. In
order to avoid any scope for future disputes, we direct all
those who are willing to rejoin at Baddi, to report there at
Baddi on 14.1.99 and 15.1.99 along with their identity cards
or other evidence to identify them and sign or put their
thumb-mark i a register in the joint presence of the Dy.
Labour Commissioner having jurisdiction over Baddi, District
Solan, Himachal Pradesh and the Dy. Labour Commissioner of
N.C.T. (Delhi). These officers shall counter sign in the
register certifying that the particular workmen had reported
at Baddi. All such workmen who rejoin shall be entitled to
the benefits of the order of this court dated 8.7.96 and
subsequent orders, in respect of continuity, back wages from
date of closure till date of such rejoining, in addition to
one year’s wages towards shifting bonus. The said amount
shall be paid by the respondent-industry to each of these
workmen, within one week of the rejoining at Baddi. In
respect of such of the workmen who do not so report by
15.1.1999 as aforesaid or who otherwise give it in writing
to the aforesaid authority that the are not willing to
rejoin, they shall be deemed to have been retrenched w.e.f.
30.11.96 and shall be entitled only to one year’s wages and
also to section 25F9B) compensation as per the order of this
court dated 8.7.96. The said amount shall be disbursed to
these employees within one week from 15.1.1999 by the
respondent-industry.
The applications of the workmen of the industry
working at Delhi are accordingly allowed and disposed of in
the manner stated above.
As the petitioner in the contempt case
(party-in-person) is not willing to join at Baddi the
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industry will pay him I year’s salary plus Section 25F(b)
compensation within 15 days from today, if not already paid.
The contempt case is disposed of accordingly.