Full Judgment Text
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PETITIONER:
MAYURAKSHI COTTON MILLS & ORS.
Vs.
RESPONDENT:
PANCHRA MAYURAKSHI COTTON MILLS EMPLOYEES’ UNION & ORS.
DATE OF JUDGMENT: 08/03/2000
BENCH:
S.N.Phukan, S.R.Babu
JUDGMENT:
RAJENDRA BABU, J. :
The appellant-mills was purchased by the State of West
Bengal in the year 1990 in the course of liquidation
proceedings initiated pursuant to orders made by the BIFR.
It is the case of the respondents that on the reopening of
the mills, most of the workmen who were working previously
in the erstwhile company were provided employment. As the
mills had been newly set up, the management was not in a
position to revise the pay scales on account of certain
financial difficulties. On August 5, 1992, a notice of lock
out was issued by the then Manager of the mills on account
of certain reasons, with which we are not concerned in these
proceedings. The validity of the lock out was challenged in
a writ petition. During the pendency of the writ petition,
the order declaring lock out was withdrawn pursuant to a
memorandum of settlement arrived at between the workmen and
the management on February 27, 1993. This fact was brought
to the notice of the High Court. Therefore, the parties
concerned sought for moulding the prayers appropriately and
the validity of the settlement arrived at between the
workmen and the management as aforesaid was also challenged
and it was brought to the notice of the High Court that
several workmen who were already working in the mills after
reopening have been kept out of employment. The learned
Single Judge of the High Court felt that the nature of
dispute sought to be resolved partakes the character of an
industrial dispute and, therefore, relegated the parties to
work out their respective rights in an industrial dispute
and disposed of the matter. On appeal, the Division Bench
went on to examine the provisions of Sections 25F and 25G of
the Industrial Disputes Act, 1947 [hereinafter referred to
as ‘the Act’] and held that it is well settled that the
service condition of a workman in any industry who has been
in continuous service for one year under an employer could
not be retrenched unless notice of retrenchment is served in
accordance with the provision of Section 25F of the Act and
paid the retrenchment compensation after following the
procedure laid down in Section 25G of the Act and that
termination of service of a workman who had been in service
for more than one year in contravention of provisions of
Sections 25F and 25G of the Act would be illegal. The High
Court thereafter took the view that it is not a case to
enforce private rights or purely contractual rights or
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obligation or to avoid it. It was a case to enforce
statutory rights conferred under Sections 25F and 25G of the
Act. On that basis, the High Court proceeded to hold that
the livelihood of the workmen was involved which is part of
Article 21 of the Constitution and hence workmen could not
have been compelled to voluntarily enter into the said
settlement for termination of service and accept the
temporary service for a period of 59 days which was clearly
arbitrary and unlawful and in clear contravention of the
provision of Sections 25F and 25G of the Act. Thus the
appeal was allowed with a direction as follows :-
"We direct the respondents-company and/or authorities
concerned not to compel the appellants to voluntarily enter
into the said agreement in contravention of the law and not
to terminate the service of the workmen on that ground and
we direct to treat the workmen concerned as employee under
employment of the company."
This order of the Division Bench is under attack in
this appeal.
The learned counsel did not so much dwell upon the
question whether the appellant-mills is a ‘State’ for the
purpose of Article 12 of the Constitution or not and even if
the appellant is held to be an instrumentality of the State,
is bound by the provisions of Part III of the Constitution
and is amenable to the writ jurisdiction of the High Court,
it was not a fit case where the various contentions raised
between the parties could have been thrashed out in a
summary proceeding. The learned counsel further submitted
that the fact that the company was in financial straits
could not be seriously disputed inasmuch as in the course of
the liquidation proceedings the Government had purchased the
same and thereafter because certain problems had arisen the
management declared a lock out and pursuant to the
settlement entered into between the workmen and the
management, the lock out was lifted subject to certain terms
and conditions mentioned in the settlement. The learned
counsel further submitted that whether the terms of the
settlement amount to unfair labour practice or results in
victimisation of any workmen and whether any of the workmen
who are members of the respondent-union was a workman after
reopening of the mills after purchase by the Government and
whether continued to be so, are all questions of fact to be
determined in an appropriate proceeding and in the present
case, reference to an industrial Tribunal would be the most
proper course. Shri Dipankar Gupta, learned senior counsel
appearing for the State of West Bengal, supported the stand
taken by the appellants and submitted that the Government
would refer the dispute in relation to the validity of the
settlement or employment of the other workmen along with all
other allied issues to an industrial Tribunal.
Shri Dholakia, learned senior Advocate appearing for
the contesting respondents, submitted that the identity of
the workmen in question was not in serious dispute and a
bare perusal of the memorandum of settlement arrived at
between the workmen and the management itself would clearly
indicate that it was oppressive resulting in victimisation
of workmen or amounting to unfair labour practice on the
part of the management resulting in unemployment of a large
number of workmen. He further submitted that it was in
those circumstances that the High Court made the order under
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appeal and that it is only in cases where the facts are in
dispute that an adjudication by any other Tribunal or a
civil court would arise but not in cases where the facts are
not in dispute. He submitted that it was not at all
difficult for the management to find out as to who were the
workmen on the reopening of the mills and provide employment
to all of them and the management cannot alter their
conditions of service to their disadvantage. He emphasised
that it is in that context the High Court had given a
direction based on Sections 25F and 25G of the Act read with
Article 21 of the Constitution and such an order which is
very progressive in nature should not be interfered by this
Court.
We have given our anxious consideration to the rival
submissions made by the learned counsel on either side.
Whether a settlement is fair or unfair or valid cannot be
examined in the absence of factual background in which the
same was entered into. If really the mills was in financial
doldrums and retrenchment had to take place in some form or
the other and if a method was to be worked out by the
management and the workmen, which is fair, it cannot easily
be said that the mills should not work with lesser number of
workmen and provide a scheme for retrenchment or otherwise.
It may not be easy to state that such settlement is unfair
or amounts to victimisation. The option was between closure
of the mills itself or opening of the mills with lesser
number of workmen. Sometimes hard choices have to be made
and sacrifices are expected to be made by either side.
These aspects have to be borne in mind in deciding such
questions. Therefore, we cannot in the abstract, in the
absence of material before the Court, state that the High
Court could have come to the conclusion one way or the other
and particularly based on the theoretical approach to
Sections 25F and 25G of the Act or Article 21 of the
Constitution. We are of the view that the order made by the
Division Bench deserves to be set aside and that of the
learned Single Judge be restored, however, with the
modification that a reference shall be made, as stated by
Shri Dipankar Gupta, in respect of all matters arising in
this case as to the employment, non- employment, the
validity of the settlement and all other allied issues and
the reliefs to be granted to the parties, to an appropriate
industrial Tribunal within a period of six weeks from today
and such Tribunal shall enter upon the reference for
adjudication as early as possible and decide the same within
a period of six months from the date of reference to it.
This appeal shall stand disposed of accordingly. In
the facts and circumstances of the case, there shall be no
orders as to costs.