THE HON’BLE SRI JUSTICE SANJAY KUMAR
WRIT PETITION NOs.26024, 26028, 26030, 28484, 28496, 28968,
28977, 28982 AND 28996 OF 2009
&
WRIT PETITION NOs., 2095, 2102, 9278, 9295, 9308, 9440, 10109 AND 10179 OF 2010
DATED 24th JANUARY, 2014 W.P.No.26024 OF 2009:
Between:
Charminar Co-operative Urban Bank Limited, Represented by its Managing Director, Mr.Khaleel Khan, Hyderabad.
A n d Mr.S.Srinivas Reddy, S/o.S.Brahmananda Reddy, Aged 37 years, Occ: Employee, R/o.H.No.16-2-738/12, Plot No.301, V.R.A.V.R. Applat Apartments, Asmanghad, Hyderabad, and others.
… Petitioner … Respondents
THE HON’BLE SRI JUSTICE SANJAY KUMAR
WRIT PETITION NOs.26024, 26028, 26030, 28484, 28496, 28968,
28977, 28982 AND 28996 OF 2009
&
WRIT PETITION NOs., 2095, 2102, 9278, 9295, 9308, 9440, 10109 AND 10179 OF 2010
C O M M O N O R D E R
In the year 2003, Charminar Co-operative Urban Bank Limited, Hyderabad, (hereinafter, referred to as ‘the Bank’), the petitioner in this batch of cases, terminated the services of a large number of its workmen en masse. The first respondent in each of these cases is such a workman. They were employed as Clerk-cum- Cashiers/Attenders/Record Assistants and were removed from service under individual termination orders dated 28.02.2003. These orders were proforma printed orders wherein only the name of the workman was to be filled in along with the amount payable to him/her. Aggrieved by these termination orders, the first respondent in each of these 17 cases along with others, totalling in all 24 workmen, approached the Assistant Commissioner of Labour-III, Hyderabad, being the Appellate Authority appointed under Section 48(1) of the Andhra Pradesh Shops and Establishments Act, 1988 (for brevity, ‘the Act of 1988’) by way of individual appeals.
A common order was passed by the said Appellate Authority on 20.04.2005. Therein, he referred to the fact that the preliminary objections raised by the Bank as to the maintainability of the appeals had already been decided by the earlier order dated 16.03.2004 and therefore did not need replication. On merits, he found that Section 25-N of the Industrial Disputes Act, 1947 (for brevity, ‘the Act of 1947’) had application to the cases and that the termination of the workmen by the Bank was in violation thereof. He further found that other provisions of the Act of 1947 had also been infringed by the Bank in the process of removing its workmen. The Appellate Authority therefore held that the termination of the appellants from service by the Bank was bad in law and that they were entitled to be reinstated. Having stated so, he took note of the poor financial condition of the Bank and found that reinstatement of the appellants was not desirable though they were entitled to such relief. He therefore directed the Bank to pay each of them wages in lieu of three months notice as contemplated under Section 25-N(a) of the Act of 1947 and retrenchment compensation under Section 25-F of the Act of 1947.
Aggrieved by the denial of the relief of reinstatement, the workmen moved the Deputy Commissioner of Labour-II, Hyderabad, being the Second Appellate Authority under Section 48(3) of the Act of 1988. This batch of 24 appeals, being S.A.Nos.1 to 24 of 2008, were disposed of by the Second Appellate Authority by common order dated 17.07.2009, wherein he affirmed the finding of the Appellate Authority that the Bank had acted in violation of statutory provisions while effecting termination of its workmen’s services. Opining so, he held that payment of compensation alone was insufficient and directed the Bank to reinstate all the workmen in service with continuity of service and attendant benefits. As regards payment of back wages, he held that the workmen were entitled to full back wages but taking into account the financial crisis faced by the Bank, he directed the Bank to pay them 50% of the back wages from the effective date of their termination from service till the date of their reinstatement.
This common order was subjected to challenge by the Bank in the present batch of cases. It was stayed unconditionally by this Court in all the cases except W.P.No.28982 of 2009, wherein the stay, granted for a limited period, was not extended. Though vacate stay petitions were filed by the respondent workmen with separate petitions seeking payment of wages under Section 48(4) of the Act of 1988, no orders were passed thereon.
It may be noted that against the finding of the Appellate Authority that the Bank had terminated the services of its workmen in violation of the applicable legal provisions, no second appeal was filed by the Bank. Similarly, the earlier order rejecting the Bank’s objections as to the maintainability of the workmen’s appeals was also left unchallenged. The said findings therefore became final. It was only the workmen who approached the Second Appellate Authority under Section 48(3) of the Act of 1988 aggrieved by the denial of full relief to them by the Appellate Authority. The issue before the Second Appellate Authority was therefore limited to the quantum of relief to be granted to the appellants before it but the said authority unnecessarily reconsidered the merits of the matter and affirmed the finding of the Appellate Authority as to the illegality underlying the termination of the workmen from service. However, this cannot be taken advantage of by the Bank at this stage to mount a challenge in these writ petitions as to the initial findings as to the illegality of the individual termination orders dated 28.02.2003 and the maintainability of the workmen’s appeals.
Having suffered adverse findings in this regard at the hands of the first Appellate Authority which attained finality, it is not open to the Bank to reopen these issues in these writ petitions. The only issue which was decided by the Second Appellate Authority under Section 48(3) of the Act of 1988 was as to the quantum of relief to be awarded to the workmen. The grievance of the Bank in the context of the said order must therefore be limited only to the aspect of the relief granted. The submissions made by Sri Meherchand Nori and Smt.K.Sesharajyam, learned counsel for the Bank, vindicating the termination orders dated 28.02.2003 and the case law relied upon by them are therefore eschewed from consideration. The only point for consideration in this batch of cases is as to whether the Second Appellate Authority, given the facts and circumstances of the case, was justified in granting the relief that it did.
Admittedly, the Bank is not operational presently and the financial crisis which originated in the year 2003 escalated with fatal consequences. Its banking license was cancelled in November, 2011 and it is now in the process of liquidation.
It is the case of the Bank that it retrenched as many as 350 employees in the year 2003 and a sum in excess of Rs.65,00,000/- was spent towards settling their dues. However, this Court is not concerned with the cases of other workmen who did not choose to protest against the actions of the Bank at that point of time. The first respondent in each of these 17 cases, along with seven others, were the only workmen who raised objections as to the manner in which their services were dispensed with. Their challenge found favour with the authorities under the Act of 1988. As stated supra, the finding as to the illegality of their removal from service cannot be reopened at this stage as the Bank did not choose to challenge the finding in this regard by the first Appellate Authority. How much amount was already spent by the Bank towards settling its workmen’s dues therefore pales into insignificance. Only the grievance of such of its workmen who invoked legal remedies needs to be addressed at this stage.
It may be noted that the first respondents in W.P.No.2095 of 2010- P.Uma Shankar (with over 5 years of service), W.P.No.2102 of 2010- J.Rajavardhan Reddy, W.P.No.10179 of 2010-C.Robert, W.P.No.9295 of 2010-S.Younus Abbas Razvi (all with over 8 years of service), W.P.No.10109 of 2010-S.Karrar Ali Khan , W.P.No.9308 of 2010-Syed Ahmed (both with over 5 years of service), W.P.No.26028 of 2009- G.Venkateswara Rao, W.P.No.28977 of 2009-Kareemunnisa Begum, W.P.No.26030 of 2009-Y.Ranjith Reddy (all with nearly 5 years of service), W.P.No.28484 of 2009-N.Udaya Sree (with nearly 4 years of service) and W.P.No.28496 of 2009-K.Surya Prakash Rao (with over 10 years of service) were all regular workmen of the Bank while the first respondents in the other writ petitions, viz., Y.Sudeep Mathur (W.P.No.28996 of 2009), R.Srinivas Reddy (W.P.No.28982 of 2009), G.Durga Devi (W.P.No.28968 of 2009), S.Mahboob Basha (W.P.No.9278 of 2010) (all with nearly 4 years of service), S.Srinivas Reddy (W.P.No.26024 of 2009) (with nearly 2 years of service) and Dilawar Ali Khan (W.P.No.9440 of 2010) (with nearly 5 years of service) were temporary workmen. Thus, all of the workmen had put in several years of service. Only S.Srinivas Reddy, the first respondent in W.P.No.26030 of 2009, who was appointed in July, 2001, had put in less than two years of service at the time of his removal.
The Bank did not reinstate these workmen or pay them any wages owing to the unconditional stay orders passed by this Court. Despite the workmen seeking payment of wages in terms of Section 48(4) of the Act of 1988, no result ensued therefrom. Section 48(4) of the Act of 1988 is categorical in terms and reads to the effect that when an employer challenges the award of the Appellate Authority directing reinstatement before any Court of Law, the employer shall be liable to pay such employee during the pendency of such proceedings full wages last drawn by him, if the employee had not been employed in any establishment during such period and an affidavit by such employee had been filed to that effect. The workmen, being the first respondent in each of these cases, filed individual affidavits in 2004 stating that they were not gainfully employed. Despite these affidavits, the Bank did not choose to place on record any rebuttal evidence that they were employed elsewhere. This is so in all the cases except in the case of Y.Ranjith Reddy, the first respondent in W.P.No.26030 of 2009. He is stated to have enrolled himself as an Advocate on the rolls of the Bar Council of Andhra Pradesh in the year 2003. This fact is not denied. Once he became a legal practitioner, Y.Ranjith Reddy ceased to be a workman under the provisions of the Act of 1947 and the Act of 1988. He would therefore be disentitled to any protection under Section 48(4) of the Act of 1988 from the date of his enrolment as an Advocate (See ADMINISTRATOR, KAMALA NEHRU MEMORIAL HOSPITAL V/s.
VINOD KUMAR
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). However, in so far as the other workmen are concerned, the Bank did not choose to pay them any wages under Section 48(4) of the Act of 1988. It also did not choose to reinstate them in service and thereafter terminate their services afresh in accordance with the due procedure laid down by law. By virtue of the unconditional stay orders secured by the Bank, the matter remained in limbo.
Though this Court adjourned the matter several times to enable the parties to settle the matter amicably, no tangible result emerged as there was no consensus. Given the present situation of the Bank, this Court must therefore endeavour to bring closure duly balancing the interests of both the parties.
The Bank is admittedly facing a financial crunch and is on the verge of liquidation. It cannot therefore be saddled with workmen for whom it has no need. That being said, the fact remains that the Bank did not follow the due procedure while dispensing with their services. No seniority was maintained in the different cadres at that time whereby, the rule of ‘last come first go’ could have been followed in 2003. On the other hand, the Bank seems to have adopted a pick and choose method while throwing out its workmen. Seniors were shown the door but juniors were retained. Further, the Bank did not even compensate the retrenched workmen in accordance with law. The present financial position of the Bank cannot therefore be sufficient validation to belittle the grave injustice done to the workmen over a decade ago. As pointed out by the Supreme Court in DEEPALI GUNDU SURWASE V/s.
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KRANTI JUNIOR ADHYAPAK MAHAVIDYALAYA (D.ED.) , denying the unfortunate workman in such circumstances would amount to rewarding the unjust employer for his illegal action in terminating the workman’s services wrongfully.
Ergo, this Court is of the considered opinion that this is a fit case where compensation should be awarded to the workmen. These workmen had put in several years of service and most of them were regular employees who were removed unceremoniously in flagrant violation of the applicable legal provisions. These facts would invariably weigh with the Court. Given the obtaining facts and circumstances and also the financial position of the Bank, this Court must necessarily mould the relief.
It would also not be possible for this Court to undertake an individual case-based computation of the compensation to be paid to each of the workmen. Settled general legal principles would have to be pressed into service in this regard. In O.P.BHANDARI V/s. INDIAN
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TOURISM DEVELOPMENT CORPN. LTD. , the Supreme Court held that compensation equivalent to 3.33 years salary (including allowances as applicable) on the basis of the last pay and allowances drawn by the workman would be a reasonable amount to award in lieu of reinstatement. This formula was affirmed in WORKMEN V/s. BHARAT
[4] FRITZ WERNER (P) LTD.
This Court is also mindful of recent trends in the decisions of Supreme Court on this aspect. I n UTTARANCHAL FOREST
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DEVELOPMENT CORPN. V/s. M.C.JOSHI , reinstatement with full back wages granted to the workman was set aside by the Supreme Court taking note of the fact that he was appointed as a daily wager and had worked for a period of roughly two years and three months. The Supreme Court opined that raising an industrial dispute after six years would justify payment of compensation of Rs.75,000/- to him in lieu of reinstatement. I n TALWARA CO-OPERATIVE CREDIT AND
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SERVICE SOCIETY LIMITED V/s. SUSHIL KUMAR , the workman was employed for a short period in two different spells between 1987 to 1990 and 1995 to 1997. Having regard to the fact that he had not worked for a long period and as the employer did not have the capacity to pay, being a sick unit, the Supreme Court held that compensation of Rs.2,00,000/- would be sufficient in lieu of reinstatement and full back wages. In ASHOK KUMAR SHARMA V/s. OBEROI FLIGHT SERVICES
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, a workman who allegedly admitted his guilt was removed from service without any disciplinary proceedings. This removal took place in the year 1986. Compensation of Rs.60,000/- awarded to him by the High Court in 2008 was enhanced by the Supreme Court to Rs.2,00,000/- in 2009.
I n SENIOR SUPERINTENDENT TELEGRAPH (TRAFFIC),
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BHOPAL V/s. SANTOSH KUMAR SEAL , the Supreme Court, keeping in mind the fact that the workmen had worked as daily wagers about 25 years ago and had hardly worked for 2 or 3 years, set aside the awarded relief of reinstatement with back wages and directed payment of compensation of Rs.40,000/- to each of them. In MANAGEMENT OF CHRIST COLLEGE REGISTERED SOCIETY V/s.
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P.N.KENCHAREDDI , the Supreme Court took note of the fact that the workman was not in service since the year 1994 and accordingly granted compensation of Rs.2,50,000. In BHARAT SANCHAR NIGAM
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LIMITED V/s. MAN SINGH , the Supreme Court directed payment of compensation of Rs.2,00,000/- to each of the daily wagers who were illegally removed. In ASSISTANT ENGINEER, RAJASTHAN
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DEVELOPMENT CORPORATION V/s. GITAM SINGH , the Supreme Court reiterated the same principle and held that a daily wager who had worked for a short period of 240 days would not be entitled to reinstatement with continuity of service and back wages owing to his termination in contravention of Section 25-F of the Act of 1947 and directed payment of compensation of Rs.50,000/-.
In the present case, the Bank as well as the workmen came up with proposals for quantification of the compensation. Perusal of these statements demonstrates that the monthly salary of most of the workmen in these cases ranged between Rs.4,000/- and Rs.5,000/-. However, S.Srinivas Reddy, G.Durga Devi, S.Karrar Ali Khan, Syed Ahmed and Dilawar Ali Khan were drawing monthly salary ranging between Rs.3,000/- and Rs.4,000/-. Taking an average monthly salary of Rs.3,500/- and Rs.4,500/- respectively across the board and applying the formula adopted by the Supreme Court in O.P.BHANDARI3, the compensation in lieu of retrenchment payable to each workman alone would be between Rs.1,40,000/- and Rs.1,80,000/- respectively. In addition to this, the workmen had to be paid retrenchment compensation under Section 25-F of the Act of 1947 and also 50% back wages (ranging approximately between Rs.1,26,000/ and Rs.1,62,000/- each) as per the direction of the Second Appellate Authority. Further, except for Y.Ranjith Reddy, the workmen would also have to be compensated for the wages payable under Section 48(4) of the Act of 1988 during the pendency of these writ petitions. However, it must be noticed that they had all filed affidavits in the year 2004 stating that they were not employed at that point of time and it is hardly believable that the same situation would be continuing till date. There is no information forthcoming from the Bank as to the present status of any of the other workmen and as to whether they are gainfully employed at present. Sri Meherchand Nori, learned counsel, submitted that the Bank is now functioning with a skeletal crew of one or two persons and is therefore not in a position to come to the assistance of this Court in this regard.
Keeping in mind the general principles enunciated by the Supreme Court and recent judicial trends, this Court deems it appropriate that the Bank should pay compensation of Rs.3,00,000/- to each of the regular workmen and Rs.2,00,000/- to each of the temporary workmen. However, in so far as Y.Ranjith Reddy is concerned, though he was also a regular workman, as he became a legal practitioner immediately after his removal from service and his loss would be less comparable to the others, the compensation payable to him is fixed at Rs.2,00,000/-. The Bank shall pay the amounts as aforestated as lump sum compensation to the workmen in these writ petitions in lieu of the relief of reinstatement of service, 50% back wages and attendant benefits granted to them under the impugned common order dated 17.07.2009 which shall stand modified accordingly.
The writ petitions are partly allowed to the extent indicated above.
In the circumstances, there shall be no order as to costs.
24th JANUARY, 2014 PGS -------------------------------------------- SANJAY KUMAR,J
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AIR 2006 Supreme Court 584 (2013) 10 SCC 324 [1986] 4 SCC 337 [1990] 3 SCC 565 (2007) 9 SCC 353 (2008) 9 SCC 486 (2010) 1 SCC 142 (2010) 6 SCC 773 [2010] 15 SCC 292 (2012) 1 SCC 558 (2013) 5 SCC 136