M/S ARIANE ORGACHEM PVT.LTD. Vs. WYETH EMPLOYEES UNION & ORS
Supreme Court of India (Division Bench (DB)- Two Judge)
Appeal (Civil), 246 of 2015, Judgment Date: Apr 29, 2015
-
“When a question of law is raised for the first time in a court of last resort, upon the construction of a document, or upon facts either admitted or proved beyond controversy, it is not only competent but expedient, in the interests of justice, to entertain the plea.” -
Therefore, with regard to the above mentioned aspect regarding the plea of the competency of the Deputy Labour Commissioner to pass an order of refusal to make a reference, although is being raised before this Court for the first time, is based on admitted facts. Hence, in accordance with the view taken by the Court of Appeal in Connecticut Fire Insurance Co. case (supra) and this Court in Gurcharan Singh case (supra), the argument advanced by the first respondent- Union deserves to be considered by this Court. Similar view has also been taken by this Court in the cases of VLS Finance Limited v. Union of India[18] and Greater Mohali Area Development Authority v. Manju Jain[19], wherein it has been held that pure question of law can be raised at any stage of litigation. In National Textile Corporation v. Naresh Kumar Jagad[20], it has been held by this Court that a new ground raising pure legal issue for which no inquiry or proof is required, can be raised at any stage.
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NO.246 OF 2009
M/S ARIANE ORGACHEM PVT. LTD. …APPELLANT
Vs.
WYETH EMPLOYEES UNION & ORS. …RESPONDENTS
WITH
C.A. NO. 247 OF 2009
J U D G M E N T
V. GOPALA GOWDA, J.
I.A.No.2 of 2015 in C.A.No.247 of 2009 for substitution of the name
of the appellant-Company is ordered.
These appeals are directed against the common impugned judgment and order
dated 16.8.2007 passed by the High Court of Judicature at Bombay in Writ
Petition No.444 of 2007, whereby the High Court quashed the order of the
Deputy Commissioner of Labour, Mumbai, dated 14.8.2006 and directed him to
refer the industrial dispute of the concerned workmen as per their demand
dated 14.11.2005, for adjudication of the matter to the Industrial Tribunal
under Section 10(1)(d) of the Industrial Disputes Act, 1947 (for short “the
Act”).
Since both the appeals are filed against the common impugned judgment and
order of the High Court, for the sake of convenience, we would refer to the
brief facts of C.A.No.246 of 2009 which are stated hereunder:
The appellant-Company, M/s. Ariane Orgachem Pvt. Ltd. was established
to manufacture and market drugs which are manufactured by it. The appellant-
Company, have taken over the alleged loss incurring pharmaceutical factory
of M/s. Wyeth Ltd. respondent No.3 herein (appellant-Company in C.A.247 of
2009), situated at 146, LBS Marg, Ghatkopar, Mumbai, along with its
permanent employees, pursuant to an agreement dated 25.6.2004 and the sale
deed dated 30.6.2004. The letters were issued to the workmen by the
appellant in this regard, to the effect that they would be employed under
its management without any interruption in their services.
On 30.08.2004, the appellant-Company acquired the erstwhile manufacturing
facility of M/s. Wyeth Ltd.-respondent No.3 and on 31.8.2004, the
respondent No.3 issued letters to its workmen working in its erstwhile
factory, informing them about the sale and transfer of the ownership and
management of the said factory to the appellant-Company in accordance with
the provision of Section 25-FF of the Act. They were further informed that
their services will not be interrupted due to such transfer and their
services will be treated as continuous and uninterrupted for the purpose of
retiral/terminal benefits. Thereafter, all the workmen whose employment
came to be transferred from M/s Wyeth Ltd. to the appellant-Company started
drawing their wages/salary and all other benefits like advance, LTA and
leave, etc. from the appellant.
On 2.9.2004, the respondent no.1-Wyeth Employees Union (for short “the
Union”), which is the recognized Union under the Provisions of the
Maharashtra Recognition of Trade Unions and Prevention of Unfair Labour
Practices Act, 1971 (for short “the MRTU & PULP Act”), filed Complaint
(ULP) No. 534 of 2004, before the Industrial Court challenging the sale and
transfer of employment of the employees but no interim relief was granted
by the Industrial Court, hence, all the workmen came on the rolls of
appellant-Company and started drawing wages from it.
The appellant claimed that it has framed Voluntary Retirement Scheme (for
short “VRS”) on 12.4.2005 for the workmen, offering amounts, tax free, to
each workman with all other dues such as gratuity, ex-gratia, provident
fund, leave encashment etc. which was operative from 12.4.2005 to
30.4.2005. On 15.04.2005, 45 out of the total 143 workmen applied for the
said VRS and collected the VRS payments and the remaining workmen collected
the VRS payments on 20.04.2005 and 21.04.2005. After the payment of the VRS
benefits, the workmen were relieved from their services by the appellant-
Company.
It is further stated by the appellant-Company that on 26.4.2005, the
first respondent-Union through its General Secretary, unconditionally
withdrew Complaint (ULP) Nos. 534 of 2004, 714 of 2004 and 771 of 2004,
confirming to the court that all the workmen had availed the VRS and the
Union did not want to pursue the cases.
After several months of accepting the VRS, the respondent-Union raised the
demand seeking their reinstatement in the Company of respondent no.3. In
response to the said demand, the appellant-Company replied that all the
workmen had taken the VRS benefits and they were not the workmen of either
the appellant-Company or the third respondent’s Company anymore, therefore,
no industrial dispute could be raised by or on their behalf by the
respondent-Union. On 12.12.2005, the respondent-Union, wrote a letter to
the Assistant Commissioner of Labour, seeking his intervention in respect
of their demand with the Company. On 01.08.2006, the Conciliation Officer
sent the failure report to the Assistant Commissioner of Labour, subsequent
to which on 14.08.2006, the office of the Deputy Labour Commissioner which
took cognizance of the failure report declined to make an order of
reference to the Industrial Tribunal stating thereby that there was no
industrial dispute in existence between the parties.
Thereafter, the newly elected leadership of the first respondent-Union
under the representation of its new General Secretary aggrieved by the
order of refusal to make an order of reference to the Industrial Tribunal
by the Deputy Commissioner of Labour filed Writ Petition No. 444 of 2007
before the High Court urging various legal grounds and questioning the
correctness of the same.
The High Court in exercise of its power quashed the order dated 14.8.2006
passed by Deputy Commissioner of Labour, Mumbai, who has refused to make an
order of reference to the Industrial Tribunal for its adjudication of the
industrial dispute between the parties. The High Court has held that the
acceptance of the benefits by the concerned workmen from the appellant may
not establish the fact that no force or compulsion was exercised by the
appellant and this is the most contentious and disputed question of fact
which could not have been decided by the State Government in exercise of
its administrative power. The High Court has held that the subjective
satisfaction of the subject matter of an industrial dispute between the
parties by the State Government is therefore, vitiated in law and making an
order of reference in respect of the concerned workmen is absolutely
essential in this regard. Thus, the High Court by issuing a writ of
mandamus, directed the Deputy Labour Commissioner to make an order of
reference to the Industrial Tribunal with regard to the demand of
industrial dispute raised by the Union dated 14.11.2005 on behalf of the
concerned workmen, for its adjudication under Section 10(1)(d) of the Act.
Aggrieved by the impugned judgment of the High Court, these appeals have
been filed by the appellant-Companies, praying this Court to set aside the
same contending that the High Court has exceeded its jurisdiction in
passing the impugned judgment and order.
It is urged by Mr. C.U. Singh, the learned senior counsel on behalf of the
appellant-Company that the VRS benefits were accepted by the concerned
workmen between 15.4.2005 to 25.4.2005 and the cheques which were issued to
them towards their voluntary retirement benefits were encashed by them.
Therefore, raising the industrial dispute by the concerned workmen after
lapse of 7 months, from the date of acceptance of the VRS benefits, is
wholly untenable in law. It has been further contended by him that many
concerned workmen have cleared their bank loans such as housing loans, Co-
operative Society/Co-operative bank loans and the appellant-Company has
received intimations from the Banks/Societies to stop deducting and
remitting loan instalments from their salaries.
It has been further contended by him that the former Joint Secretary of the
respondent no.1-Union had withdrawn the Complaint (ULP) Nos. 534 of 2004
and 714 of 2004 and Complaint (ULP) No.771 of 2004, after stepping into the
witness box and confirming to the Court that all the workmen had availed
the VRS benefits and the first respondent-Union did not wish to pursue the
cases. Therefore, the demand raised by the first respondent-Union on behalf
of the concerned workmen through its General Secretary contending that they
have not availed the VRS benefits under the scheme is only an afterthought
and the same does not amount to an industrial dispute and therefore, there
is no dispute for the Industrial Tribunal to adjudicate. The Deputy Labour
Commissioner has rightly arrived at the conclusion on the basis of the
facts on hand and declined to make an order of reference to the Industrial
Tribunal for adjudication of the same. This important aspect of the case
has not been taken into consideration by the High Court while quashing the
order of refusal to make an order of reference to the Industrial Tribunal
and it has erroneously issued a writ of mandamus to the Deputy Commissioner
of Labour against the appellant by directing him to make an order of
reference of the industrial dispute on the demands raised by first
respondent-Union on behalf of the concerned workmen.
It is further contended by the learned senior counsel on behalf of the
appellant that the first respondent-Union has not made any allegation
against the appellant, regarding the alleged coercion and fraud played by
the appellant in obtaining the voluntary retirement letters, either in the
demands submitted to the appellant or before the Conciliation Officer.
Therefore, raising the said contention by the first respondent-Union for
the first time before this Court, without it being first raised before the
Industrial Tribunal and the Conciliation Officer is not permissible in law
as held by this Court in the case of Bishundeo Narain & Anr. v. Seogeni Rai
& Anr.[1] Further, it is contended that in view of Section 59 of the MRTU
and PULP Act, there is an express bar on the first respondent to raise an
industrial dispute against the appellant-Company. This legal aspect of the
case has been considered by this Court in the cases of M/s. Mahabir Jute
Mills Ltd., Gorakhpur v. Shri Shibban Lal Saxena & Ors.[2] and Govind Sugar
Mills Ltd. & Anr. v. Hind Mazdoor Sabha & Ors.[3] Further, the said
allegations made by the first respondent-Union with regard to the alleged
coercion upon the concerned workmen by the appellant is not factually
correct and the same cannot be considered by this Court as it is a
frivolous and incorrect statement of fact made on behalf of the first
respondent-Union with a view to raise frivolous industrial dispute against
the appellant-Company and the respondent No.3.
The learned senior counsel has further placed reliance upon the following
decisions of this Court in Bank of India & Ors. v. O.P. Swarnakar &
Ors.[4], A.K. Bindal & Anr. v. Union of India & Ors.[5], Punjab National
Bank v. Virender Kumar Goel & Ors.[6], Punjab & Sind Bank & Anr. v. S.
Ranveer Singh Bawa & Anr.[7] and Bank of India & Ors. v. K.V. Vivek Ayer &
Anr.[8] in support of the proposition of law that once the VRS is obtained
and accepted by the concerned workmen along with all other monetary
benefits, the same would amount to availing benefits of the scheme and no
claim can be made by the concerned workmen against the employer for its
reconsideration and no order of reference can be made for the industrial
dispute by the appropriate government as the same does not exist for
adjudication. Therefore, the principle of estoppel is applicable on the
concerned workmen to raise an industrial dispute against the appellant-
Company and the respondent No.3 herein on the subject matter of voluntary
retirement, for the reason that once they have accepted the voluntary
retirement from their services and withdrawn all the monetary benefits
which were paid to them by the appellant, they cannot raise the industrial
dispute in this regard as the same is not permissible in law. He has
further placed reliance upon the judgments of this Court in the cases of
Gyanendra Sahay v. Tata Iron & Steel Co. Ltd.[9] and Vice-Chairman &
Managing Director, A.P.S.I.D.C. Ltd. & Anr. v. R. Varaprasad & Ors.[10],
wherein the aforesaid principles of law have been reiterated by this Court.
Further, it has been contended by him that the scope of judicial review
power of the High Court to examine the order passed by the State Government
in exercise of its administrative power in the writ petition is very
limited as has been held by this Court in the cases of Secretary, Indian
Tea Association v. Ajit Kumar Barat & Ors.[11] and ANZ Grindlays Bank Ltd.
v. Union of India & Ors.[12] Therefore, the learned senior counsel has
submitted that the impugned judgment and order is required to be interfered
with by this Court in exercise of its jurisdiction as the exercise of
judicial review power by the High Court is bad in law which cannot be
allowed to sustain.
On the other hand, Mr. Sanjay Singhvi, the learned senior counsel on
behalf of the first respondent-Union has sought to justify the impugned
judgment and order passed by the High Court contending that the Deputy
Labour Commissioner acting as a delegatee of the State Government has
erroneously refused to make an order of reference to the Industrial
Tribunal on the demands raised by the workmen and he has committed a grave
error in law and therefore, the High Court has rightly exercised its
extraordinary and supervisory jurisdiction and quashed the same by issuing
a writ of mandamus. The learned senior counsel has further contended that
the Deputy Commissioner of Labour in fact and in law is not a delegatee of
the State Government and therefore, he could not have legally made an order
of refusal to make an order of reference of the industrial dispute to the
Industrial Tribunal for its adjudication. It has been further contended by
him that the signatures of the concerned workmen were obtained on blank
papers and there was no VRS scheme introduced by the appellant. Hence, the
question of seeking voluntary retirement from their services does not
arise. Further, the respondent No.3-M/s. Wyeth Ltd., the Company in which
the concerned workmen were working initially had intimated the stock
exchange about the stoppage of its manufacturing operations at the
Company’s plant at LBS Marg, Ghatkopar, Mumbai. Therefore, it is clear that
the said Company wanted to discontinue and close down the factory and
terminate the services of the concerned workmen from their services.
However, being a profitable Company, with profit making operations, the
Company has resorted to achieve its end through a subterfuge by obtaining
the signatures of the concerned workmen on the blank papers by using undue
influence, coercion etc. in order to circumvent the provisions of Section
25(O) of the Act. Therefore, the alleged voluntary retirement of the
concerned workmen, is a disputed question of fact, as the workmen are
contending that they have not voluntarily submitted any application for
voluntary retirement from their services to the appellant-Company which
fact is seriously disputed by the appellant and therefore, the same is
required to be adjudicated by the competent Industrial Tribunal and not
referring the said dispute between the parties by the State Government to
it is an arbitrary and unjustified exercise of power which is not within
the jurisdiction of the State Government, in exercise of its administrative
power under the provisions of Section 10(1)(d) read with the Third Schedule
of the Act. For the above reason itself, the High Court is justified in
quashing the impugned order in the writ petition by passing the impugned
judgment and order which does not warrant interference by this Court in
exercise of its appellate jurisdiction in these appeals.
It has been further contended by the learned senior counsel for the first
respondent-Union that the appellant-Company is owned and controlled by the
Runwal group, which is a builder/developer and it has entered into a sham
arrangement with M/s Wyeth Ltd. on 30.8.2004 purporting it to be an alleged
transfer of the ownership of its undertaking in favour of the appellant.
However, it is a transfer of the assets of the Company only without the
transfer of the business of the appellant in the connected appeal
(respondent no.3 herein) and the same cannot be said to be a genuine
transfer of undertaking of M/s Wyeth Ltd. in accordance with law and in
terms of Section 25 FF of the Act. The said action of appellant-Company and
the respondent no.3 herein is in violation of the provisions of Section
25(O) of the Act.
Thus, it is urged by the learned senior counsel that in view of the
aforesaid reasons the question of the alleged transfer of the workmen from
M/s. Wyeth Ltd. to the appellant-Company is only a ruse and was done only
with a view to acquire the property for real estate development. Therefore,
the factual contentious issue of the alleged voluntary retirement of the
concerned workmen and the acceptance of the monetary benefits by them need
to be adjudicated by the competent Industrial Tribunal under an order of
reference of the industrial dispute which has to be referred by the State
Government. This aspect of the matter has not been considered by the State
Government at the time of passing an order declining to exercise its
administrative power to make an order of reference to the Industrial
Tribunal for its adjudication of the existing industrial dispute between
the workmen and the employer effectively.
Further, it has been contended by the learned senior counsel that the
alleged VRS benefits said to have been given to the concerned workmen is a
false plea pleaded by the appellant-Company before the Conciliation Officer
to justify their illegal action and the same requires scrutiny by the
Industrial Tribunal on the basis of the evidence that has to be adduced by
the parties. The findings of fact need to be recorded by it after
adjudication of the dispute that is required to be referred to it by the
State Government in exercise of its administrative power under the
provisions of the Act.
It has been further contended by the learned senior counsel on behalf of
the first respondent that after the resignation of the earlier General
Secretary of the first respondent-Union was accepted, a new Committee of
the respondent-Union was elected. Thereafter, it decided to take up the
issue of illegal termination of services of the concerned workmen by the
appellant-Company. Further, the Deputy Labour Commissioner, who has acted
as the delegatee of the State Government, has not looked into the fact that
it took about 2 to 3 months for the new Committee of the first respondent-
Union to take over the affairs of the Union which was running under the
guidance of its former General Secretary and to act in the matter of the
forced termination of the concerned workmen from their services. The
petition submitted to the Conciliation Officer by the respondent-Union
specifically pleads that “neither any voluntary scheme was ever framed nor
published by the appellant” and the concerned workmen have not retired from
their services voluntarily. This aspect of the matter has not been taken
into consideration by the Conciliation Officer as well as the appropriate
State Government at the time of passing the order refusing to make an order
of reference to the Industrial Tribunal for adjudication of the industrial
dispute. The State Government has also not noticed the relevant fact that
the former General Secretary, without the proper authorisation from either
the first respondent-Union or the concerned workmen, withdrew the earlier
complaints referred to supra, filed on behalf of the concerned workmen.
Further, the State Government has failed to consider the fact that the
appellant-Company has stated about the VRS being published for the
concerned workmen for the first time, only before it and not before the
Conciliation Officer in the earlier proceedings. Further, due to coercion
and fear, the workmen were compelled to sign on the blank papers and the
purported voluntary retirement letters alleged to have been submitted to
the appellant were not considered by it. The first respondent-Union called
upon the appellant-Company to produce the Resolution passed by its Board
before the Conciliation Officer, with regard to the alleged VRS and the
order of approval said to have been granted by the Income Tax Authority for
such scheme. The same were not produced by the appellant before the
Conciliation officer. The State Government at the time of passing its order
ought to have considered this important factual aspect of the matter before
refusing to pass an order to make a reference to the Industrial Tribunal
regarding the dispute between the parties in relation to their illegal
termination. For this reason also, the High Court is justified in quashing
the order of refusal to make an order of reference and therefore, it is
rightly justified in issuing a writ of mandamus to the State Government to
make an order of reference to the jurisdictional Industrial Tribunal for
adjudication of the industrial dispute between the parties.
The learned senior counsel has further urged that the failure report of the
dispute was addressed to the Additional Commissioner by the Conciliation
Officer on 1.8.2006, but the Deputy Commissioner of Labour called for the
file from the Conciliation Officer and declined to exercise his power under
Section 10(1)(d) read with the Third Schedule of the Act, without adverting
to a single contention urged on behalf of the workmen in the petition
submitted before the Conciliation Officer by the first respondent-Union.
The non-consideration of the claim made by the respondent-Union on behalf
of the concerned workmen by the Deputy Commissioner of Labour at the time
of refusing to pass an order of reference, not only vitiates the impugned
order in the writ petition on account of non application of mind by the
alleged delegatee of the State Government but also vitiated in law for the
reason that the Deputy Commissioner of Labour is not the competent officer
to make an order of reference to either the Industrial Tribunal or the
Industrial Tribunal. The Additional Commissioner of Labour is the only
competent authority who is the delegatee of the State Government as per the
notification dated 9.8.2003 issued by the Ministry of Labour, Government of
Maharashtra and therefore, he alone could have passed an order of reference
under Section 10(1)(d) of the Act. Thus, the order of refusal to make an
order of reference of the existing industrial dispute between the parties
to the Industrial Tribunal is void ab initio in law as the same has not
been exercised by competent officer as the delegatee of the State
Government. On this ground itself the impugned judgment and order of the
High Court is justified in quashing the order of refusal to make an order
of reference regarding the industrial dispute to the Industrial Tribunal.
With reference to the above mentioned rival legal contentions urged on
behalf of the parties, we have carefully examined the impugned judgment and
order, with a view to find out whether the High Court is justified in
quashing the order of refusal to make an order of reference regarding the
industrial dispute raised by the first respondent-Union on behalf of the
concerned workmen to the Industrial Tribunal for its adjudication. We
answer the same in the affirmative in favour of the first respondent-Union
for the following reasons:-
It is an undisputed fact that the concerned workmen are the employees
of M/s Wyeth Ltd. who is the respondent no.3 herein and the appellant in
the connected appeal. The contention urged by the learned senior counsel on
behalf of the respondent-Union is that the alleged transfer of the
undertaking of M/s Wyeth Ltd. in favour of the appellant-Company is not a
genuine transfer and it is a sham one, as it is a transfer of the assets of
the Company only not the transfer of business of M/s Wyeth Ltd. Therefore,
the same is not in conformity with the provisions of Section 25FF of the
Act. This aspect of the matter requires adjudication by the Industrial
Tribunal in order to find out the correctness of the plea, whether the
transfer of the undertaking M/s Wyeth Ltd. in favour of the appellant is
genuine or not and whether the concerned workmen have accepted the retiral
benefits and other monetary claims voluntarily, as pleaded by the
appellant. This complicated question of fact and law could not have been
decided by the alleged delegatee of the State Government in exercise of its
administrative power, as he is not the competent authority on behalf of the
State Government to make an order of reference to the Industrial Tribunal.
The conclusion arrived at by the High Court is supplemented with the
reasons arrived at by this Court. Therefore, quashing of the order of
refusal to make an order of reference by the High Court is perfectly legal
and valid which need not be interfered with by this Court in exercise of
its jurisdiction.
The other important factual aspect of the case is whether the voluntary
retirement of the concerned workmen was forced or not is required to be
produced by the parties before the Industrial Tribunal for its detailed
examination and scrutiny. The fact that certain documents were sought to be
summoned at the instance of first respondent-Union during the conciliation
proceedings from the appellant-Company by the Conciliation Officer which
were not produced by it is one more important factor which is required to
be considered by the Industrial Tribunal under Section 10(1)(d) read with
the Third Schedule of the Act in exercise of its original jurisdiction to
resolve the disputed questions of fact. Further, the VRS produced on record
by the Management gives it the discretion to arbitrarily fix the
compensation varying from Rs.50,000/- to Rs.7,11,000/-, which if proved,
would be considered as arbitrary and there would be a grave miscarriage of
justice to the concerned workmen. This aspect of the matter has been
ignored by the Deputy Labour Commissioner, who has erroneously refused to
make an order of reference to the Industrial Tribunal for its adjudication
of the existing industrial dispute.
Further, there are serious allegations made against the appellant-Company
by the workmen regarding the alleged coercion, undue influence and force
used on them for obtaining their signatures on blank papers, which needs to
be examined very carefully by the Industrial Tribunal after recording
evidence from both the parties. Prima facie, the absence of documentary
evidence produced by the appellant-Company to show that the VRS was framed
by it and converting the signatures of the concerned workmen obtained on
the blank papers amounts to forced termination of the services of the
concerned workmen which is a disputed question of fact which requires
adjudication by the competent Industrial Tribunal and therefore, the demand
regarding the alleged termination of the concerned workmen is required to
be referred to the Industrial Tribunal by the State Government. The non
consideration of this aspect of the matter in the order dated 14.08.2006
passed by the Deputy Labour Commissioner highlighting only the factual
aspect pleaded by the appellant-Company unilaterally and not referring to
the facts pleaded on behalf of the concerned workmen by the first
respondent-Union is once again totally marred by non application of mind on
the part of the Deputy Commissioner of Labour, apart from the fact that the
Deputy Labour Commissioner has no competency to exercise his power under
the provisions of Section 10(1)(d) of the Act, either to make reference or
to refuse to make reference to the Industrial Tribunal. On the above
grounds also, the impugned judgment and order of the High Court is not
required to be interfered with by this Court in these appeals. Reliance has
been placed upon the decision of this Court by the learned senior counsel
on behalf of the first respondent-Union in the case of National Insurance
Co. Ltd. v. Boghara Polyfab Pvt. Ltd.[13], wherein this Court has held
thus:
“26. When we refer to a discharge of contract by an agreement signed by
both parties or by execution of a full and final discharge voucher/receipt
by one of the parties, we refer to an agreement or discharge voucher which
is validly and voluntarily executed. If the party who has executed the
discharge agreement or discharge voucher, alleges that the execution of
such discharge agreement or voucher was on account of fraud/coercion/undue
influence practiced by the other party and is able to establish the same,
then obviously the discharge of the contract by such agreement/voucher is
rendered void and cannot be acted upon. Consequently, any dispute raised by
such party would be arbitrable.”
Further, the failure report of the conciliation proceedings is not the
sufficient material evidence to arrive at the conclusion by the State
Government to decline to exercise its statutory power under the provisions
of Section 10(1)(d) read with the Third Schedule of the Act either to
make/or not to make an order of reference. The refusal to make an order of
reference by the State Government’s delegatee amounts to determination of
the existing dispute between the parties by the State Government in the
absence of relevant and material evidence on record which ought not to have
been done by him while exercising his power under Section 10(1)(d) of the
Act. In this regard, the High Court has rightly placed reliance upon the
case of Ram Avtar Sharma & Ors. v. State of Haryana & Anr.[14], the
relevant para of which reads thus:
“11. The appropriate Government being the Central Government in this case
declined to make a reference as per its order dated December 9, 1983 in
which it is stated that 'the action of the management in imposing on the
workmen penalty of removal from service on the basis of an enquiry and in
accordance with the procedure laid down in the Railway Servants (Discipline
& Appeal) Rules. 1968 is neither malafide nor unjustified. The appropriate
Government does not consider it necessary to refer the dispute to the
Industrial Tribunal for adjudication.' Ex facie it would appear that the
Government acted on extraneous and irrelevant considerations and the
reasons hereinbefore mentioned will mutatis mutandis apply m respect of
present order of the Government under challenge. Therefore for the same
reasons, a writ of mandamus must be issued.
12. Accordingly all the writ petitions are allowed and the rule is made
absolute in each case. Let a writ of mandamus be issued directing the
appropriate Government in each case namely the State of Haryana in the
first mentioned group of petitions and the Central Government in the second
petition to reconsider its decision and to exercise power under
Section 10 on relevant and considerations germane to the decision. In other
words, a clear case of reference under Section 10(1) in each case is made
out.”
Further, the High Court has rightly adverted to various judgments of this
Court including Bombay Union of Jornalists v. State of Bombay[15] wherein
it was held thus:
”6. ………it would not be possible to accept the plea that the appropriate
Government is precluded from considering even prima facie the merits of the
dispute when it decides the question as to whether its power to make a
reference should be exercised under Section 10(l)read with Section 12(5),
or not. If the claim made is patently frivolous, or is clearly belated the
appropriate Government may refuse to make a reference. Likewise, if the
impact of the claim on the general relations between the employer and the
employees in the region is likely to be adverse, the appropriate Government
may take that into account in deciding whether a reference should be made
or not. It must, therefore, be held that and prima facie examination of the
merits cannot be said to be foreign to the enquiry which the appropriate
Government is entitled to make in dealing with a dispute under Section
10(1)……”
Therefore, in the present case, the dispute raised by the respondent-Union
on behalf of the concerned workmen is neither patently frivolous nor is it
a belated claim of the concerned workmen. The contention of the learned
senior counsel for the appellant that the workmen are barred from raising
the industrial dispute on the ground of estoppel, is also rejected by this
Court in view of the fact that estoppel is a principle of equity which
deals with the effect of contract and not with its cause. It does not mean
that a void or voidable contract cannot be adjudicated by the Industrial
Tribunal/courts merely because the concerned workmen have accepted the
voluntary retirement as pleaded by them and other benefits from the
appellant as per the case of National Insurance Co. Ltd. (supra).
Having regard to the facts and circumstances of the case and the
contentions urged on behalf of the learned counsel for the parties, we have
come to the conclusion that these are the disputed questions of fact in
this case, which requires determination on the basis of evidence by the
Industrial Tribunal and therefore, a valid reference has to be made to it
by the State Government. The various decisions relied upon by the learned
senior counsel Mr. C.U. Singh on behalf of the appellant referred to supra
are misplaced and have no application to the fact situation of the present
case.
Further, the High Court has not considered another important aspect of the
case, namely, that the Deputy Commissioner of Labour is not entrusted with
the power under Section 10(1) (d) of the Act as the delegatee of the State
Government as per the new Notification dated 09.08.2003, issued by the
Industries, Energy and Labour Department, Mantralaya, Mumbai in exercise of
its power conferred under Section 39(b) of the Act which is produced on
record. As per the said notification, the State of Maharashtra has
conferred its power upon the Labour Commissioner and the Additional Labour
Commissioner to exercise its power under Section 10(1),(2) & (3) and other
provisions of the Act. There is no other notification produced by the
employer either before the High Court or this Court to show that the Deputy
Labour Commissioner has got power as the delegatee of the State Government
to make an order of reference under the provisions of Section 10(1)(d) read
with the Third Schedule of the Act to the Industrial Tribunal. On this
ground also, the order of the Deputy Labour Commissioner, refusing to make
an order of reference regarding the industrial dispute of the concerned
workmen is vitiated in law, as the same is void ab initio in law and
therefore, quashing of the said refusal order by the High Court is
perfectly justified.
The appellant-Company has also contended that the respondent-Union has
also raised the legal question regarding the competency of the Deputy
Labour Commissioner in passing the order of reference for the first time
before this Court and the same was not raised before the High Court,
therefore, the same shall not be permitted to be raised in these
proceedings and this Court need not go into this aspect of the matter which
is wholly untenable in law. This contention raised by the learned senior
counsel for the appellant is rejected as the said contention is contrary
to the issues/principles laid down by the Privy Council and this Court in
the following judgments:
In Connecticut Fire Insurance Co. v Kavanagh[16], Lord Watson has
observed as under:
“When a question of law is raised for the first time in a court of last
resort, upon the construction of a document, or upon facts either admitted
or proved beyond controversy, it is not only competent but expedient, in
the interests of justice, to entertain the plea.”
The aforementioned view of the Court of Appeal have been relied upon
by this Court in Gurcharan Singh v Kamla Singh[17]. Therefore, with regard
to the above mentioned aspect regarding the plea of the competency of the
Deputy Labour Commissioner to pass an order of refusal to make a reference,
although is being raised before this Court for the first time, is based on
admitted facts. Hence, in accordance with the view taken by the Court of
Appeal in Connecticut Fire Insurance Co. case (supra) and this Court in
Gurcharan Singh case (supra), the argument advanced by the first respondent-
Union deserves to be considered by this Court. Similar view has also been
taken by this Court in the cases of VLS Finance Limited v. Union of
India[18] and Greater Mohali Area Development Authority v. Manju Jain[19],
wherein it has been held that pure question of law can be raised at any
stage of litigation. In National Textile Corporation v. Naresh Kumar
Jagad[20], it has been held by this Court that a new ground raising pure
legal issue for which no inquiry or proof is required, can be raised at any
stage. Further, in the case of Port Trust v Hymanshu International[21],
this Court has held thus:
“2……. The plea of limitation based on this section is one which the court
always looks upon with disfavour and it is unfortunate that a public
authority like the Port Trust should, in all morality and justice, take up
such a plea to defeat a just claim of the citizen. It is high time that
governments and public authorities adopt the practice of not relying upon
technical pleas for the purpose of defeating legitimate claims of citizens
and do what is fair and just to the citizens. Of course, if a government or
a public authority takes up a technical plea, the Court has to decide it
and if the plea is well-founded, it has to be upheld by the court, but what
we feel is that such a plea should not ordinarily be taken up by a
government or a public authority, unless of course the claim is not well-
founded and by reason of delay in filing it, the evidence for the purpose
of resisting such a claim has become unavailable……”
The conclusion arrived at by the High Court that the order of refusal to
make an order of reference of the existing industrial dispute to the
Industrial Tribunal by the Deputy Commissioner of Labour is bad in law and
it has rightly issued the writ of mandamus to the State Government and the
Deputy Commissioner of Labour for the reason that the employer has been
litigating the matter before the High Court for several years and the High
Court, based on the pleadings and evidence on record, must have felt that
the disputed questions of fact pleaded by the parties warrant the
adjudication of the dispute effectively by the Industrial Tribunal.
Therefore, we do not find any reason to set aside the order of writ of
mandamus issued by the High Court to the State Government represented by
the Deputy Labour Commissioner.
The reliance placed upon the various judgments of this Court by the
learned senior counsel for the appellant on merits of the alleged voluntary
retirement of the concerned workmen need not be examined in these appeals
by this Court, as those judgments have no application to the fact situation
of the present case and it would be premature to apply the said principles
to the fact situation at this stage, particularly, having regard to the
legal contentions urged by the learned senior counsel on behalf of the
respondent-Union.
The learned senior counsel on behalf of the appellant-Company has further
contended that the dispute raised by the first respondent-Union on behalf
of the concerned workmen under the provisions of the Act and the request
made by it to refer the industrial dispute to the Industrial Tribunal for
its adjudication is barred under Section 59 of the MRTU & PULP Act. The
aforesaid contention is wholly untenable in law for the reason that the
cause of action for the present complaint under the provisions of the Act
is with regard to the illegal action on the part of the appellant-Company
in obtaining the alleged voluntary retirement letters from the concerned
workmen, whereas, the proceedings under the MRTU & PULP Act are in respect
of the alleged transactions between the appellant-Company and M/s Wyeth
Ltd. which has resulted in the transfer of the services of the workers from
M/s. Wyeth Ltd. to the appellant-Company which cause of action in respect
of these proceedings arose on 30.8.2004. Thus, the present dispute is with
regard to the so-called “Voluntary Retirement” of the concerned workmen
which took place on 15.4.2005 and 20th/21st April, 2005, wherein the
subject matter is whether such “Voluntary Retirement” was obtained by undue
influence, coercion, fraud, etc. and whether the workmen are entitled to
reinstatement with full back wages and continuity of service. Therefore,
the subject matter of the complaint under the provisions of MRTU & PULP Act
and the subject matter of the industrial dispute raised by the first
respondent-Union under the provisions of the Act are totally different as
they arise out of different cause of action. Hence, the contention urged in
this regard by the learned senior counsel on behalf of the appellant-
Company must fail.
Hence, in our considered view the impugned judgment and order passed by the
High Court is perfectly legal and valid and the same does not call for
interference by this Court except with certain modification in the
operative portion of the order of the High Court, namely, with regard to
the direction given to the State Government represented by the Deputy
Labour Commissioner which is not in accordance with the notification
referred to supra. The said direction has to be given to the Additional
Labour Commissioner (in accordance with the Notification dated 09.08.2003)
to make an order of reference to the Industrial Tribunal within six weeks
from the date of receipt of the copy of this order as the matter has been
pending at the reference making stage itself for several years at the
instance of the appellant-Company and the respondent no.3 herein.
We therefore, issue the direction to the State Government represented by
its delegatee, the Additional Commissioner of Labour, to make an order of
reference to the competent Industrial Tribunal within six weeks from the
date of receipt of the copy of this judgment. We further direct the
Industrial Tribunal to decide the case within six months from the date of
receipt of such order of reference after affording an opportunity to both
the parties and to pass appropriate award.
The Industrial Tribunal shall not be influenced by the observations made in
this judgment. The Industrial Tribunal shall examine the case of the
parties with reference to the evidence that may be produced on record by
them and the rival legal contentions that would be urged on behalf of the
parties may be considered at the time of adjudication of the dispute and
the same has to be adjudicated on its own merit uninfluenced by the
observations made in the judgment.
These appeals are dismissed with costs of Rs. one lakh in each appeal
towards the cost of these proceedings, for the reason that they have caused
delay in referring the dispute to the Industrial Tribunal for its
adjudication. The same shall be deposited before the Industrial Tribunal
immediately after the order of reference is made to it and before the
parties are called upon to file their respective claims and the said amount
shall be paid to the concerned workmen proportionately through the first
respondent-Union. The order dated 24.9.2007 granting stay of the impugned
order shall stand vacated.
……………………………………………………………………J.
[V.GOPALA GOWDA]
……………………………………………………………………J.
[C. NAGAPPAN]
New Delhi,
April 29, 2015
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[1] (1951) SCR 548
[2] (1975) 2 SCC 818
[3] (1976) 1 SCC 60
[4] (2003) 2 SCC 721
[5] (2003) 5 SCC 163
[6] (2004) 2 SCC 193
[7] (2004) 4 SCC 484
[8] (2006) 9 SCC 177
[9] (2006) 5 SCC 759
[10] (2003) 11 SCC 572
[11] (2000) 3 SCC 93
[12] (2005) 12 SCC 738
[13] (2009) 1 SCC 267
[14] (1985) 3 SCC 189
[15] AIR 1964 SC 1617
[16] (1892) A.C 473, 480 (PC)
[17] (1976) 2 SCC 152
[18] (2013) 6 SCC 278
[19] (2010) 9 SCC 157
[20] (2011) 12 SCC 695
[21] ( 1979) 4 SCC 176
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|REPORTABLE |