IN THE HIGH COURT OF GUJARAT AT AHMEDABAD SPECIAL CIVIL APPLICATION No. 3196 of 2001 For Approval and Signature:
HONOURABLE MR.JUSTICE S.R.BRAHMBHATT ========================================================= 1 Whether Reporters of Local Papers may be allowed to see the judgment ?
2 To be referred to the Reporter or not ?
3 Whether their Lordships wish to see the fair copy of the judgment ?
4 Whether this case involves a substantial question of law as to the interpretation of the constitution of India, 1950 or any order made thereunder ?
5 Whether it is to be circulated to the civil judge ?
========================================================= GUJARAT PETROFILLS EMPLOYEES CONGRESS & 2 - Petitioner(s) Versus UNION OF INDIA & 3 - Respondent(s) ========================================================= Appearance :
MR LALJI R MOKARIA for Petitioner(s) : 1, 3,MR RAMESH J SHARMA for Petitioner(s) : 1, 3,MR TUSHAR MEHTA for Petitioner(s) : 2, MR KH BAXI for Respondent(s) : 1 - 2.
MS KN VALIKARIMWALA for Respondent(s) : 1 - 3. MR RITURAJ M MEENA for Respondent(s) : 1 - 2. NOTICE SERVED for Respondent(s) : 3, OFFICIAL LIQUIDATOR for Respondent(s) : 4, RULE SERVED for Respondent(s) : 4, ========================================================= CORAM : HONOURABLE MR.JUSTICE S.R.BRAHMBHATT Date : 05/10/2012
ORAL JUDGMENT
1. Heard ld. Advocate for the parties. The petitioner, the registered Trade Union of the employees of the second respondent, have approached this Court by way of this petition under Article 226 of the Constitution of India for seeking appropriate writ, order, or direction to the respondents for making payment of arrears of wages from 1992 to 30.06.1996, pursuant to the settlement and award of the competent Tribunal in terms thereto dated 30.05.1996 in reference IT No.79/1994.
2. Facts in brief, as could be gathered from the memo of petition and accompanying documents need to be set out as under in order to appreciate the rival contentions of the learned Counsel of the parties.
2.1 The second respondent happened to be MultiState Cooperative Society, constituted under the provisions of the Delhi Cooperative Societies Act. The said society was functional from 10.09.1974. The society was formed under the auspices of the Government of India and thus, Government of India controlled effectively the affairs of the society, and respondent No.2 was registered as MultiState Cooperative Society.
3. The petitioners have pleaded in the petition that on account of perverse control over the respondent No.2, was in respect of part and parcel of the State, as defendant under the provision of Article 12 of the Constitution of India, the society was thus, one of the public sector enterprises, popularly referred to as PSE and as such the policies promulgated by the Government of India time and again in respect of PSEs were also have made applicable to the respondent No.2 Society. The members of the petitioners' union were employees and workmen of the said society and they were receiving the wages and revisional wages as per the provisions of the Industrial Dispute Act, read with the guidelines time and again issued by the Government of India. The wage structure prevalent at the relevant time under the valid settlement came to an end on 31.12.1991 and thus, the wage revision thereafter had become due and payable on account of prohibitory orders or restoring orders of Union of India in respect of certain wage revisions in majority of public sector enterprises. The wage revision talks and the negotiation did not yield any result, ultimately the matter was required to be referred to the Competent Forum under the Industrial Disputes Act, 1947, wherein, it was marked as Reference I.T.No.79/1994. During pendency and adjudication of the said reference, both the parties came to terms, whereunder, the dispute with regard to wage revision with effect from 01.01.1992, for further period of 5 years i.e. 31.12.1996, was worked out and the said agreed terms of settlement were jointly submitted to the Tribunal in the Reference I.T. No.79/1994 for its approval so as to make it as binding award between the parties. The Tribunal, as it is stated herein above, under its order and award dated 31.05.1996 approved the settlement and passed an award which became binding upon parties to the settlement.
4. The settlement, however, in the last para, which is reproduced on page No.52, point No.35 contained provisions with regard to settlement being arrived at, subject to approval of the Board, the Tribunal and Government of India. In short, the condition was incorporated in the settlement itself that the terms of the settlement were intended to be approved by the Board i.e. governing board of the respondent No.2 society. The Tribunal, before which the reference was pending and the Government of India as an approving authority of respondent No.2, the Board in its earnestness approved the said settlement, but, it was under impression that the settlement before it becomes operative was required to be approved by the Government of India also and accordingly, sent proposal to the Government of India with its recommendation for approving and implementing the settlement, which had taken the shape of award between the parties under the provisions of Industrial Disputes Act, 1947. The Government of India, in turn informed the Board, i.e. the Management of respondent No.2 that the settlement in respect of such kind of wage settlement are not anymore required to be approved by the Government of India as the Government of India is not extending any budgetary support to such settlement or wage revisional demands and therefore, while effecting the wage revision after negotiation, the two broad factors should be borne in mind viz. the wage revision, if approved, may not result into increasing the production cost and ultimate price of the produce and the second thing is it should be depend upon its own fund generating capacity. Thus, the requirement of approval, which was thought to be impediment of parting the settlement was not evident and Union of India clearly informed the respondent No.2 this fact. Therefore, the Board of respondent No.2 in its meeting being No.143 resolved unanimously that in light of the communication received from the Government of India, the wage revision is effected from the given date, but the payment of arrears would be made dependent upon the availability of internal generation of the funds of the society.
5. The wages from the current period got revised and in terms of revised wage scale, the employees started receiving the scale on the basis of the revised wage scale. In other words, the settlement was given effect to the arrears. The question of payment of arrears was some or the other not addressed to and ultimately it so happened that the winding up proceedings had to set in and as a result whereof, the unit was required to be closed. The approval for closure was also obtained and a scheme, which is popularly known as voluntarily separation scheme, originally framed by the Government of India, in respect of public sector enterprises was required to be offered to the employees of the respondent No.2 society also. It was made clear to all and ultimately pursuant thereto an undertaking was obtained from the individual, incorporating of a condition that the employee has clear understanding that he shall have no claim or seek any right including that all employment, even as per the society rules and the dues are paid as per the Government of India's guidelines incorporated on 18.12.2000, vide its communication. Thus, communication in form of undertaking is sought to be made basis for denying arrears of claim, coupled with other submissions qua non entitlement of employees to receive the arrears as the arrears claim coupled with other submissions qua non entitlement of employees to receive the arrears as the arrears was made specifically conditional and dependent upon the internal generation of funds. The respondent No.2 is under the litigation and the official liquidator as defendant, which has been joined as respondent No.4, who stand on behalf of respondent No.2.
6. Learned Advocate for the petitioner invited this Court's attention to the terms of the settlement, the award and the letter addressed by the Managing Director to the Government of India on 10.07.1996, and contended that effective reading of all the three, would unequivocally show that the claim of arrears has in fact been accrued to the petitioners that moment. The board approved the same. The approval of the Board is unequivocally spelt out from the communication of the Managing Director dated 10.07.1996, addressed to the Government of India, where under an attempt was made to seek approval to the entire settlement. The Government of India's communication in response to the letter which was taken into consideration in the meeting i.e. the 143rd meeting of the Board, would also show that the requirement of approval was specifically clarified not to be existing and hence, the terms of settlement could be said to have been fulfilled so far as the implementability of the settlement is concerned. In other words, the award of the settlement was even if treated to be conditional, then the conditions were futile in light of the aforesaid clear averments in the documents referred herein above. Therefore, it would not be appropriate for the respondents to deny the payment of arrears of wages only on the ground of fact that meeting No.143 of Board, the Board resolved otherwise the resolution of the Board whenever no effect of changing and/or whittle down in any manner. The settlement which was in fact made conditional for its operation, could not have been made applicable as wage revision is in effect, but the arrears is denied on special plea of nonavailability of internal sources.
7. Learned Advocate for the petitioner also invited this Court's attention to the communication dated 27.02.2001, which is originating from the Government of India, Ministry of Labour to the Director of respondent No.2, which is approved under Section 25(0) of the Industrial Disputes Act for closure, which also contains in specific terms, the approval is granted for closure of the Petrofils after payment of arrears of current wages and offer of Voluntarily Separation Scheme in the best interest of workers. This communication is heavily relied upon by the advocate for the petitioner and indicated the terms of the undertaking, which are sought to be held out against the employee for denying them the benefit of arrears, cannot be construed contrary to the permission of closure granted by the competent policy, as the permission of closure would be granted only after the requirement of the Industrial Disputes Act is completely fulfilled. In that view of the matter, the admissibility of the arrears cannot be denied on grounds for which they have been sought to be denied and hence, the petition is required to be allowed.
8. Ld. Advocate for the petitioner contended that the arrears could be paid out of the assets already alienated and sold, the sale proceeds as per their information is amounting to Rs.265 Crores, whereas, the claim of arrears is only Rs.10.39 Crores, which should not be in any manner difficult for the respondent No.4 to part with in favour of the workmen, who have in fact earned their wages right after putting up their efforts and toil.
9. Ld. Advocate for respondent No.4, in defense, submitted that the settlement, which was converted into award, show clearly conditional and the condition of it being approved by the Board of respondent No.2 as well as by the Government of India, may be viewed appropriately. The Government of India, in fact, on earlier occasions had imposed ban upon the indiscriminate award, negotiation by management of public sector enterprises with its workman. The learned advocate for the respondent No.4 invited attention of this Court to additional affidavit in reply, filed at page 226 and the accompanying documents and contended that the policy of imposing moratorium on wage revision was promulgated way back on 17.01.1991, which came to be relied under the policy circular to 12.04.1993 and as per that policy, board guidelines were made to be borne in mind while negotiating the demand for wage revision. If the management of respondent No.1 in its earnest has contemplated requirement of approval from the Union of India being an agency controlled by Government of India, then, there was no jurisdiction on the part of the workman to insist for arrears without awarding the approval. The requirement of approval, though, was strictly speaking not warranted, but, despite this practice, as a controlling agency, when the board thought it fit, it was required to be viewed from different perspective. The approval was clarified not to be required by the Union of India, but, in other process, the Union of India in unequivocal terms informed the Board as to what are the principles under which the wage revision settlement is to be negotiated and accepted and the lack of budgetary support and requirement of generating internal resources to meet the requirement of wage revision without affecting the fund, products and price, were the essential practice and as per the said guidelines, the Board in its custom decided in its meeting No.143 dated 30.11.200 came to the conclusion that the arrears could not be made conditional, so, it can also be said to be modification of the approval or withdrawal of the approval and therefore, the petitioners are not justified in submitting that the approval of the Board was there and therefore, the condition of implementation of the award is fulfilled and the approval of the Board could not be said to be unamenable and/or not liable to be modified at all. In view of this;
1. Board, if taken into consideration its financial construction and decided the difference of payment of arrears, then the same should make it conditional and generating of funds which could never be generated and the society had to wound up would not be justified in any manner.
2. Without prejudice to aforesaid contention, with regard to admissibility of the arrears, on account of backdrop of developments after the 143rd meeting, it was submitted that the undertaking filed as a result of acceptance of offer of VSS, the workmen forfeited their right to raise any claim which would include the present claim of seeking arrears, or payment against arrears, as otherwise, it would amount to seriously affecting the financial considerations, which had gone into making decision of winding up and therefore, the claim which was unequivocally given up, could not have been permitted to be raised and even if it is raised, does not require to be allowed as it was expressly agreed by the workman not to raise any claim qua arrears.
3. Ld. Advocate Shri Meena for the Union of India invited this Court's attention to affidavit filed at page 72 and supported the stand taken by the liquidator's counsel called inadmissibility of claim of arrears. However, he could not dispute the fact of communication from Ministry of Labour, Government of India, wherein, it is clearly mentioned that the approval is accorded subject to payment of arrears of current wages. The Court is of the considered view that the entire controversy is required to be viewed from the scheme of Industrial Dispute Act, 1947, and the relationship of petitioner and the employer respondent No.2. The fact remains to be noted that the periodical wage revision was accepted practice and phenomenon in not only this public sector undertaking but of any of public sector undertaking and Government of India is therefore issuing guidelines time and again so as to agitate the affairs of public sector undertaking and the produce generated by this PSU's and by its marketing and price in accordance with law, which includes the provisions of Industrial Disputes Act, 1947 also.
4. The respondent No.2 was though limb and agency of the State, none the less, was purely an industry governed by the provisions of Industrial Disputes Act and as such, was amenable to the jurisdiction and direction and awards of the Court under the provisions of Industrial Dispute Act. The workmen were therefore, legitimately entitled to seek redressal of the grievances under the provisions of Industrial Disputes Act, 1947. The periodical wage revision flowing from the settlements and practice was due in case of the present principle of union also and the earlier wage settlement was coming to an end on 31.12.1991 and therefore, the negotiation for wage revision were on going when they did not yield any reasoned report, which was required to be made and ultimately the demand for wage revision was subject matter of adjudication before the Competent Authority under the provisions of Industrial Disputes Act, 1947 in terms of the reference being No.79/1994.
10. The communication accompanying the latest reply affidavit from page 226, in my view, does not indicate that there was any requirement of any specific approval to a settlement or terms of settlement in any manner from the Government of India. In fact, the communications dated 12.04.1996 and 17.01.1994 are specifically clear, in respect of the autonomy and independence given to the management of public sector enterprises for negotiating wage revisions with its workforce. The broad guidelines were prescribed, which were required to be borne in mind while negotiating the payment for wage revision viz. the revision may not result into increase of price of the product or production given so as to affect its final prices and that the budgetary support in this regard would not be available from the Government of India and the PSU will have to generate its own funds to meet with this requirement or application. Thus, when the settlement was executed between the parties on 23.05.1996, there was no obligation on the part of the management to seek any specific approval at all from the Government of India and it was well within its power, authority and competence to enter into any settlement, if in case, the broad guidelines and criteria mentioned in the communication of 1993 and 1994 was fulfilled. Accordingly, the negotiation culminated into settlement though the settlement deed condition with regard to it being approved by the Board of respondent No.2 as well as Government of India, approved by the Government of India, was in fact, not warranted at all, nor was the approval of the Board as the representative of the Board were representing the respondent No.2 before the Court. However, if the plain reading of the settlement is taken to its literal meaning, then also the approval of the Board is clearly referred to and it is no one's case that the Board did not approve at all, the proposal dated 10.09.1996 for approval of Government of India. In my view, this was wholly unwarranted as Government of India did not require to be consulted, much less, requested for approval in terms of the communication and guidelines dated 12.04.1993 and subsequent clarification of 1994. Moreover, it is required to be noted at this stage that, the letter dated 10.07.1996 is self sufficiently indicative of the fact that broad criteria and guidelines envisaged in the communication dated 12.04.1993 and 17.01.1994 were fulfilled and the settlement as it is, was not, in any manner, contrary to those guidelines and sufficient agreement was demanded to see to it that the guidelines is complied in its letter and spirit and therefore, the communication dated 10.07.1996 assumes greater significance says the case of the respondent No.2 is concerned, which cannot be believed by saying that the Board did have any other right to modify its approval or reason which is approved. Communication from the Government of India informing the respondent No.2 that there exist no requirement of approval when the two broad principles have been followed the same cannot be construed, as sought to be construed by the learned advocate for the respondent No.4, clothing the management or Board of management with power to rescind, modify or alter the approval and make the implementation conditional of raising the resources. Assuming for the sake of examining by holding that the condition of meeting the obligation within generation of funds would have been in line with the guideline, then also the fact cannot be overruled that the 5 years period had gone by the time of new wage revision had arrived and the wage revision at least from the accruing date that is from the date of meeting of 1943 was implemented. Therefore, the arrears for the period from 01.01.1992 to 30.06.1996 could not be denied and when the society has been wound up and the liquidator is appointed, the availability of fund is also a factor, which cannot be said to be a factor, which is not required to be taken into consideration. The claim of the wages cannot be denied in any manner, the workmen cannot be even said to have waived their right, in any manner, as plain reading of the communication or scheme dated 18.12.2000, does not spell out as to how and in what manner the arrears, which is already been due and payable is to be treated or dealt with. In fact, if one looks at Board Meeting No.43, there also the admissibility of arrear though made conditional, on availability of the funds, the entitlement was not denied or not accepted. Therefore, on this ground also it can be said that when the VSS was offered, it is required to be construed in the spirit, since, all retrial dues or benefits accrued from the factum of termination of relationship as an employer and employee, which cannot be separated, so as to cover the arrears which had already been agreed and found admissible for the work which was already done and for which the wages were admissible as per understanding. The Court is therefore of the view that the appropriate direction is required to be issued to the respondent No.4 that the demand for arrears may be strictly in accordance with law, provisions and proprietary, prescribed under the law and the claim of the workman may not be denied solely on the ground of non availability of the funds of the same and relying upon the observations of meeting No.143 or subsequent communication.
11. With these observations, the petition is allowed to the aforesaid extent. Rule is made absolute with no order as to costs.
12. Shri. Baxi for the liquidator, one of the respondent herein, submits that the Court may stay this operation of this award for a period of 4 weeks. The request is vehemently opposed. The objection is overruled. This order shall take effect only from 05.11.2012.
Ankit* [S.R.BRAHMBHATT, J.]