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Muir Mills, A Unit Of National ... vs Presiding Officer, Labour ...

High Court Of Judicature at Allahabad|30 January, 2008


1. Heard learned Counsel for the petitioner and Sri R.N. Kushwaha holding brief of Sri A.K. Gautam, learned Counsel for respondent No. 2.
2. This writ petition is directed against the order dated 01-9-2006 allowing the application of the workman under Section 33-C(2) of U.P. Industrial Disputes Act, 1947.
3. The petitioner Mill was earlier a private enterprise but when it closed down, firstly its Management was taken over and thereafter the Mill was nationalised under the Sick Textile Undertaking (Nationalization) Act, 1974. The effect of nationalization was that the petitioner Mill along with its entire property stood vested in the Central Government under Section 3 (1) of the Nationalisation Act and under Section 3 (2), it stood transferred and vested in the Nationalization Textile Corporation where-after it was transferred to its subsidiary known as National Textile Corporation (U.P. Ltd.) with effect from 1.4.1974.
4. The respondent workman was appointed on temporary basis as peon in the petitioner Mill in 1981 but his services were retrenched with effect from 6.9.1983 which led to a reference which was registered as Adjudication No. 318 of 1984. The Labour Court vide its award dated 29.7.1987, finding that there was violation of Section 6-N of the U.P. Industrial Disputes Act, held the termination to be illegal and directed his reinstatement with back wages. In compliance of the said award, he was reinstated on 3.12.1987 and was paid his entire back wages.
5. Despite pumping large amounts of money by the Central Government into the Mill, its production deteriorated by every passing year and when the financial support from the Central Government was stopped, it resulted into closing of the production in the Mill from 1.4.1991. Subsequently, the Mill was completely closed down with effect from 9/11.3.2004 with the due permission of the Central Government under the Industrial Disputes Act.
6. 11 Units of the Subsidiary Corporation, including the petitioner Mill was declared sick and the matter was referred to the Board for Industrial and Financial Reconstruction where a reference No. 504 of 1993 was registered. The Board vide its order dated 21.3.2002 framed rehabilitation scheme under which 9 mills out of the 11, including the petitioner Mill, were proposed to be closed and it was directed to float a Voluntary Retirement Scheme. Earlier, a Voluntary Retirement Scheme was invoked with effect from 14.8.1992, but in view of the directions of the Board, a Modified Voluntary Retirement Scheme (here-in-after referred to as M.V.R.S.) was introduced which became effective in the Mill with effect from 13.6.2002. Earlier the scheme benefited only the regular employees who had worked for 240 days but thereafter it was amended and made applicable even to the temporary and daily wagers also.
7. The scheme was displayed on the notice board of the Mill when nearly all the employees, including the workman opted under it. The respondent workman moved an application on 12.7.2002 under the aforesaid M.V.R.S. which was duly accepted by the Mill vide order dated 31.10.2002 with effect from 1.11.2002 and in pursuance thereof he was paid a sum of Rs. 2,67,791/-, including the amount of ex-gratia and he gave a declaration dated 18.11.2002 that he had received all his amount due and no claim remained outstanding against it.
8. However, after expiry of about eight months, the workman made an application under Section 33-C (2) before the Authority appointed for the said purpose under the UP. Industrial Disputes Act claiming that he has not been paid his entire ex-gratia and a sum of Rs. 30,921/- still remains outstanding. The Authority registered it as Misc. Case No. 11 of 2003. A detailed reply was filed by the petitioner Mill stating that once the workman had accepted the benefit under the M.V.R.S. and had executed the declaration of no dues or claim, the relationship of master and servant between the parties had ceased. The petitioner Mill also justified that the amounts already paid to the respondent workman was in consonance with the provisions of the scheme. It was also urged that the Authority appointed under the U.P. Industrial Disputes Act had no jurisdiction because the appropriate Government in the case of the petitioner was the Central Government and only the Authority appointed under Industrial Disputes Act could entertain it.
9. Nevertheless, the Authority without considering the basic argument of the petitioner, rendered the impugned order holding that in view of the award he was entitled to ex-gratia even for the period he had not worked even for a single day.
10. Learned Counsel for the petitioner has firstly urged that after availing the benefit under the M.V.R.S. and executing the declaration, the relationship of master and servant between the parties had ceased and, therefore, the application was not maintainable.
11. A perusal of declaration given by the workman shows that he had categorically declared that no amount under any head was due against the Mill and he had voluntarily snapped the link of master and servant. He has also declared therein that he would not raise any claim whatsoever. The workman has not denied the execution of the aforesaid declaration but has explained that at the time of signing the document he was not aware that full ex-gratia amount has not been paid. His counsel has also contended before the Authority and before this Court that in view of the award of the Labour Court, he would be deemed to be in service from the date of the retrenchment and, therefore, he is entitled for ex-gratia taking into account the years in which he could not work due to the retrenchment. The ex-gratia cannot be claimed by any workman as a matter of right nor it is covered by any rules, statutory or otherwise. The ex-gratia is paid by the Management as a reward to his employees for satisfactory work. A perusal of the scheme, which is on record, shows that ex-gratia was payable to only those employees, whether temporary or daily wagers, who had worked at least for 30 days in a year. It is not denied that the workman did not work even for a single day for the period between 1984 to 1987. The workman had exercised his option, under the Scheme with his eyes wide open, cannot now turn around to challenge the scheme itself because it postulates "actual working."
12. The Apex Court in the case of A.K. Bindal and Anr. v. Union of India and Ors. , while considering the effect of such voluntary retirement scheme has held "after the amount is paid and the employee ceases to be under the employment of the company or the undertaking, he leaves with all his rights and there is no question of again agitating for any kind of his past rights, with his erstwhile employer including making any claim with regard to enhancement of pay scale for an earlier period. If the employee is still permitted to raise a grievance" the entire purpose of introducing the scheme would be frustrated. Reiterating this view, the Court in HEC Voluntary Retd. Employees Welfare Society and Anr. v. Heavy Engineering Corporation Ltd. and Ors. has further gone on to hold that when an employee takes the benefit under the Voluntary Retirement Scheme he contracts out of jural relationship by resorting to Golden Handshake' and they are bound by their own act and the parties would be bound by the terms of contract of the Voluntary Retirement.
13. A Division Bench of Kerala High Court in the case of Everestee v. District Labour Officer 1999 (83) F.L.R. 151, while considering the status of such voluntary retiree, has held that he cannot be said to be a workman under Industrial Disputes Act.
14. In view of the aforesaid, the first argument of the petitioner is bound to be accepted.
15. However, since the very jurisdiction of the Authority appointed by the State Government under the U.P. Industrial Disputes Act has been questioned, it would be appropriate to deal it too.
16. It is urged that as the petitioner Mills which is a Unit of the National Textile Corporation is entirely owned and controlled by the Central Government, it is only the Authority appointed by the Central Government under the Industrial Disputes Act could entertain any application under Section 33-C(2) as the appropriate Government was the Central Government.
17. The specific allegation made in the objection filed before the authority and also before this Court to the effect that the entire shares are held by the Central Government and even wages paid to the employees of the Mills are provided by the Central Government which owns and controls it, has not been denied. A Constitution Bench of the Apex Court in the case to Steel Authority of India v. National Union Waterfront Workers and Ors. has held that if the industry is being carried on by an authority of the Central Government, the Central Government will be the appropriate authority. Similar view has been expressed by a learned Single Judge of this Court in the case of National Textile Corporation (U.P.) Limited and Anr. v. State of U.P. and Ors. Writ Petition No. 45538 of 2003 decided on 14.9.2004. The counsel for the workman has failed to point out any decision to the contrary. Thus, this argument of the petitioner has also to be accepted.
For the reasons above, this writ petition succeeds and is allowed. The impugned order dated 01-9-2006 is quashed. No order as to costs.
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Muir Mills, A Unit Of National ... vs Presiding Officer, Labour ...


High Court Of Judicature at Allahabad

30 January, 2008
  • D Singh