IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 28TH DAY OF MAY, 2019 BEFORE THE HON’BLE MR.JUSTICE R.DEVDAS WRIT PETITION NO.25594/2018 (L-RES) BETWEEN THE MANAGEMENT OF WIPRO LTD, (NOW CALLED AS WIPRO ENTERPRISES LTD), PLOT NO. 4, ANTHARASANAHALLI INDUSTRIAL AREA, TUMKUR 572106.
REP BY ITS VICE PRESIDENT- EMPLOYEE RELATIONS (BY SRI S.S.NAGANAND, SR. COUNSEL FOR SRI B.C.PRABHAKAR, ADVOCATE) AND WIPRO EMPLOYEES ASSOCIATION (AITUC) PLOT NO. 4, ANTHARASANAHALLI INDUSTRIAL AREA TUMKUR 572 106 (BY SRI VILAS R DATAR, ADVOCATE) ... PETITIONER ... RESPONDENT THIS WRIT PETITION IS FILED UNDER ARTICLE 226 OF THE CONSTITUTION OF INDIA PRAYING TO CALL FOR RECORDS LEADING TO THE PASSING OF THE AWARD DATED 28.3.2018 PASSED BY THE INDUSTRIAL TRIBUNAL, BENGALURU IN I.D.60/2013 VIDE ANNEX-Q, QUASH THE AWARD DATED 28.3.2018 PASSED BY THE INDUSTRIAL TRIBUNAL, BENGALURU IN I.D.60/2013 VIDE ANNEXURE ‘Q’ BY HOLDING THAT THE FINAL OFFER OF INCREASE OF RS.2,600/- PER MONTH AS CTC MADE BY THE PETITIONER'S IS JUSTIFIED AND ETC.
THIS WRIT PETITION HAVING BEEN HEARD AND RESERVED ON 27.03.2019 AND COMING ON FOR PRONOUNCEMENT OF ORDERS, THIS DAY, THIS COURT MADE THE FOLLOWING:
ORDER The petitioner is a Private Limited Company registered under the Companies Act, 1956, having its registered office at Bengaluru. When it was established in the name of M/s.Wipro Limited, it had various business divisions such as consumer care and lighting, infrastructure engineering, IT business segment etc. On 28.03.2013, by de-merger, the consumer care and lighting, infrastructure engineering and other non-IT business segments formed a separate entity known as ‘Wipro Enterprises (P) Limited.’ We are concerned with Wipro Enterprises (P) Limited in this matter and more specifically with respect to the factory unit at Tumakuru which manufactures Santoor Bathing Bar, Chandrika Ayurvedic Soap and Chandrika Amrutham.
2. The respondent-Union which is the sole collective bargaining union of the workmen terminated the earlier settlement dated 31.12.2008, vide letter dated 21.03.2012 and placed fresh demands dated 21.03.2012. The respondent-Union sought for increase in basic wages, Dearness Allowance, service weightage, grade allowance, City Compensatory Allowance etc. According to the petitioner- Management the total increase sought in the salary, both direct and indirect, would workout to Rs.9,392.75/-, excluding the other demands. The petitioner-Management contends that the average salary in the month of March 2012 was around Rs.11,000/- per month. Therefore, it is contended that the demand would amount to over and above 100% increase including indirect cost, which no employer could afford to concede. In the bilateral meetings that were held between the Union and the Management, the final offer given by the Management was Rs.2,139/- gross and Rs.461/- as indirect cost, totally amounting to Rs.2,600/- per month as cost to the Company. It is stated that the Union responded with a proposal dated 07.09.2012 suggesting an average increase at Rs.3,071/- as cost to the Company which would be equivalent to 25.63% increase, however it was also stated that the expectation of the workmen was Rs.4,000/- per month. However, since the negotiations failed, the respondent-Union raised a dispute before the jurisdictional labour authorities and the matter was referred to the Industrial Tribunal for adjudication on the following points:
a) Whether the Management of M/s.Wipro Limited, Plot No.04, Antharasanahalli Industrial Area, Tumakuru, is justified in not considering the charter of demands submitted by the General Secretary of Wipro Employees Association (AITUC) vide letter dated 21.03.2012 as indicated in Annexure ‘1’ ?
b) If not to what relief the workmen are entitled to ?
3. The Industrial Tribunal, while holding that the Management was not justified in not acceding to the demand of the workmen, passed the impugned order dated 28.03.2018 granting almost all the demands raised in the charter of demands. Being aggrieved, the petitioner- Management is before this Court calling in question the impugned award dated 28.03.2018.
4. Shri S. S. Naganand, learned Senior Counsel appearing for the petitioner-Management submitted that the Tribunal has basically erred in assuming that as per the consolidated balance sheet the net profit of M/s.Wipro Enterprises (P) Limited was around Rs.500 crores for the year 2012, 2013 and 2014 and therefore it proceeded to hold that the management is capable of paying the demanded increase in wages.
5. The learned Senior Counsel submitted that the petitioner herein had contended before the Tribunal that the average increase given to the workmen in the other Wipro Soap factories for the period of four years is as follows:
The average increase given at other Wipro Soap Factories for the period of 4 years.
Direct Indirect CTC Baddi, Himachal Pradesh 2516 391 2907
The average increase given in Non Soap Factories in this Region (Karnataka/TN) for the period of 4 years.
6. It was submitted that enough material was placed before the Tribunal to substantiate this contention. The learned Senior Counsel, therefore submitted that the wages paid to the workmen at Tumakuru unit are very much comparable with similarly placed industries. It was further submitted that wage fixations have a long term implications and would impose recurring liability on the Management. Any disproportionate fixation of wages without having regard to the reality of the situation and the continued capacity of the unit to pay higher wages would adversely affect the viability of the unit and would put the employment of the employees at stake.
7. In order to substantiate its contention that the performance of each individual unit alone should be considered for the purpose of wage increase, while having an eye on the average wages of the other units belonging to the Management and other industries in the vicinity, the Management had contended before the Tribunal that the net profit of Wipro Enterprises (P) Limited, which was around Rs.500 crores cannot be taken into consideration since the Company had earned profits from the other divisions such as consumer care & lighting and other non-IT sectors. In this regard, it was submitted that the Tumakuru unit has 125 workmen and as per the balance sheet, the unit had earned a profit of Rs.1.26 crores only. It was pointed out from paragraph-45 of the impugned award that the Tribunal had recorded the cross-examination of MW-1 which would substantiate that WIPRO as a whole was having more than one lakh employees, while the Tumakuru unit had only 125 workmen. It was therefore submitted that the percentage of contribution of Tumakuru unit in the profits of the Company was less than 5%. The balance sheet pertains to 49 subsidiary companies and the average salary of the other factories manufacturing soap when compared to that of the Tumakuru unit, is in fact on the lower side. It was pointed out from the impugned award that the Tribunal was carried away by the fact that the Company had purchased foreign brands such as Yardley and had the capacity to accede to the demand made by the respondent-Union. It was also pointed out from the impugned award that the Tribunal has observed that Mr.Azim Premji, the Chairman of Wipro Limited, is a Philanthropist and had contributed more than Rs.20 crores of his personal fund for social cause. Learned Senior Counsel submits that these observations of the Tribunal would demonstrate that the Tribunal had in fact, relied upon irrelevant factors, while deciding the reference.
8. The learned Senior Counsel further pointed out from the evidence and cross-examination of MW-3, Senior Manager (Accounts), who is well conversant with the financial matters that the certificate Ex.M18, issued by NDS & Co., Chartered Accountants indicated the profits of Tumakuru unit in respect of financial years was as follows:
9. It was also pointed out from the impugned award that the Tribunal erred in coming to a conclusion that the Tumakuru unit which is manufacturing soaps, according to the consolidated balance sheet, had a turnover of Rs.1,300/- crores. It is submitted that on the face of it this observation and conclusion is erroneous, since the Tumakuru unit having 125 workmen and a limited production capacity, could not have had a turnover of Rs.1,300 crores. It was submitted by the learned Senior Counsel that the turnover of Rs.1,300 crores is the consolidated figure of all the four units manufacturing soaps, at Baddi Himachal Pradesh, Haridwar Uttaranchal, Amalner Maharashtra and Tumakuru at Karnataka.
10. In order to buttress this contention, the learned Senior Counsel sought to produce certificates issued by K.S.R.Murthy & Co., Chartered Accountants, regarding financial position of the other three units at Baddi Himachal Pradesh, Haridwar Uttaranchal, Amalner Maharashtra, for the years 2013-2014, 2014-2015 and 2015-2016. However, learned counsel for the respondent-Union raises objection stating that the Chartered Accountant is not a statutory Chartered Accountant and the certificate issued by K.S.R.Murthy & Co., Chartered Accountants cannot be legally considered. The learned Senior Counsel submits that sufficient material was placed before the Tribunal to substantiate the contention of the management that the entire profit earned by the Tumakuru unit, when compared to the demands raised by the respondent-Union, if acceded to, the financial implication would be that the demands will be more than the profit earned by the Tumakuru unit. It is therefore submitted that the settled legal position is that the entire profit earned by the organization cannot be earmarked to meet the demands made by the Trade Union. On the other hands, it is submitted that the normal industrial practice, which is also settled position is that portion of the profit in the range of 30-35% could be earmarked for meeting the charter of demands.
11. Per contra, learned counsel for the respondent- Union, Shri. Vilas R Datar submits that the Tribunal has rightly appreciated the evidence on record and the finding on fact could not be interfered with in a writ proceedings, under Article 226 and 227 of the Constitution of India. In this regard, the learned counsel placed reliance on the decisions of a Constitution Bench in Nagendra Nath Bora and Another Vs. Commissioner of Hills Division and Appeals, Assam and Others, reported in AIR 1958 SC 398 and Hari Vishnu Kamath Vs. Ahmad Ishaque and Others, reported in AIR 1955 SC 233. The learned counsel further relied upon the decisions of the Apex Court in the case of Estralla Rubber Vs. Dass Estates (P) Ltd. reported (2001) 8 SCC 97 and State of U.P. and Another Vs. Man Mohan Nath Sinha and Another, reported in AIR 2010 SC 137, to submit that while the powers of the Industrial Tribunal in the matter of Settlement is very wide, the scope and ambit of excise of power and jurisdiction by a High Court under Article 227 is restricted to serious dereliction of duty and flagrant violation of fundamental principles of law and justice.
12. The learned counsel for the respondent-Union, while placing reliance on the decision of the Hon’ble Supreme Court in the case of M/s.Bareilly Electricity Supply Co. Ltd. Vs. The workmen and Others, reported in (1971) 2 SCC 617, submits that mere production of Balance Sheet and Profit and Loss Account of the Company does not by its mere production amount to a proof of it or of the truth of the entries therein. Similarly, in Basavarajappa (A.G.) Vs. State of Mysore, reported in LAWS (KAR) 1964 1 12, it was submitted that a Division Bench of this Court had held that High Court is not competent to review the evidence adduced before the Enquiry Officer. Its duty is merely to see whether the conclusion is supported by any evidence.
13. The learned counsel further submitted that the Hon’ble Supreme Court, in the case of M/s Hydro (Engineers) Pvt. Ltd. Vs. the Workmen, reported in AIR 1969 SC 182, has held that it is a matter of discretion for the Tribunal to decide from the circumstance of each case from which date its award should come into operation. It was held that no general rule can be laid down as to a date from which the Tribunal should bring its award in force.
14. Heard Shri. S.S.Naganand, learned Senior Counsel for the petitioner-Management and Shri. Vilas R Datar, learned counsel for the respondent-Union and perused the writ papers.
15. The question that boils down for consideration is, ‘whether the Tribunal has properly considered the evidence on record, while coming to a conclusion that the Management M/s. Wipro Enterprises (P) Limited earned profits of over Rs.500 Crores and considering the net profit, if total demand of the respondent-Union is accepted, then the extra financial burden on the Management is just Rs.1.26 Crores per year and whether the conclusion drawn by the Tribunal in acceding to the demands raised by the Union is just and proper or whether it requires interference at the hands of this Court?’ 16. On going through the evidence on record, this Court is of the considered opinion that the Tribunal has not appreciated the evidence on record in the right perspective. The consequences of the impugned award is an upward revision of more than 80-90% of the wages, which according to the normal Industrial Standards is wholly unreasonable.
17. The decisions cited by the learned counsel for the respondent-Union on the proposition that High Courts, while issuing writ of Certiorari may invoke its jurisdiction only when error is apparent on the face of the record and not every error either of law or fact, which can be corrected by a superior Court, in exercise of its statutory powers under Articles 226 and 227 of the Constitution of India, is taken note of. However, it is also well settled that in exercise of such supervisory jurisdiction, the High Court would be entitled to interfere with the conclusions of an inferior Court or Tribunal, if the Court/Tribunal ignores material piece of evidence from the purview of consideration or the conclusion is based upon any error of law – Raghunathe Jew at Bhapur Vs. State of Orissa and others, reported in (1999) 1 SCC 488.
18. Nevertheless, this Court is of the opinion that the Management requires to be granted an opportunity to produce evidence to prove its contention that the total profit earned by the Management, in respect of its factory units producing soaps and personal care products includes all the four factory units, while the profits earned by Tumakuru unit, which would be relevant for decision making may be placed on record and the Tribunal is required to reconsider its decision based on such evidence.
19. It is relevant to notice that this Court had passed an interim order dated 20.06.2018, while staying the operation of the impugned award, directing the petitioner-Management to pay Rs.3,000/- per month, as an interim measure, over and above the average wages, paid to the respondent workmen. I.A.No.1/2018 was filed on 27.09.2018, by the respondent- Union seeking modification of the interim order and to pay net increase of Rs.10,000/- per month on their gross salary. It is more than three years after interim directions were issued. Therefore, this Court is of the considered opinion that till the Tribunal reconsiders the matter and passes an award, the petitioner-Management shall pay Rs.4,000/- per month on the gross salary to the workmen, thereby enhancing the salary by Rs.1,000/- per month, over and above Rs.3,000/- per month as ordered by this Court on 20.06.2018.
20. In the light of the above, this Court proceeds to pass the following:
ORDER The writ petition is partly allowed.
The impugned award dated 28.03.2018, in I.D.No.60/2013, passed by the Industrial Tribunal, Bengaluru, is hereby set aside.
The matter is referred back to the Tribunal.
The petitioner-Management is permitted to make an application before the Tribunal for production of additional evidence regarding Profit and Loss/financial position of the Tumakuru unit as well as the other three units belonging to the petitioner-Management, which manufacture soaps, detergents and consumer care products. The respondent-Union may file objections to the application, if necessary.
The respondent-Union shall be permitted to cross-examine the witness of the Management.
The Tribunal shall thereafter proceed in accordance with law and pass an award, as expeditiously as possible and at any rate within a period of four months from 10th of June, 2019, when the parties herein shall appear before the Tribunal, without any further notice.
All other pending interlocutory applications do not survive for consideration, in view of the disposal of the main matter.
SD/- JUDGE JT/DL