National Kamgar Union vs Kran Rader Pvt. Ltd.

CIVIL APPEAL No.20 OF 2018 (Arising out of S.L.P.(C) No.18413 of 2015)

National Kamgar Union ….Appellant(s)

VERSUS

Kran Rader Pvt. Ltd. & Ors. …Respondent(s)

JUDGMENT

Abhay Manohar Sapre, J.

1. Leave granted.

2. This appeal is filed by the appellant-Trade

Union against the final judgment and order dated

12.09.2014 passed by the High Court of Judicature

at Bombay in Writ Petition No.5241 of 2003

Signature Not Verified whereby the High Court allowed the writ petition Digitally signed by ASHA SUNDRIYAL Date: 2018.01.05 16:30:18 IST Reason: filed by respondent No.1-Kran Rader Pvt. Ltd. and

set aside the award dated 08.04.2003 passed by the

1 Industrial Court, Pune in a Complaint (ULP) No.544

of 1990 and, in consequence, dismissed the

complaint filed by the appellant herein.

3. In order to appreciate the short issue involved

in the appeal, it is necessary to set out few relevant

facts infra.

4. The appellant is the Trade Union registered

under the Trade Union Act, 1926 having several

members working in Factories. Respondent No.1

owned a factory (manufacturing unit) at Pune. This

Unit was originally owned by respondent Nos. 2 and

3 who, in turn, sold it to respondent No.4 in 1991

and then it was owned by respondent No.1. The

Unit was engaged in the manufacture of several

components like Traction Gears for supply to

Railways, forging for oil industries and other

manufacturing units etc. The members of the

appellant-Union were working in respondent No.1’s

factory at all relevant time.

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5. In 1990, respondent No.1 suffered business

loss in running the said manufacturing unit and,

therefore, decided to close down the said unit

permanently. With that end in view, respondent

No.1 served a notice of closure to the State

Government (Maharashtra) under Section 25 FFA of

the Industrial Disputes Act, 1947 (in short, “ID Act”)

on 29.08.1990 with a copy to the appellant-Union

expressing therein their intention to close the

operation of the Unit on expiry of 60 days with effect

from 29.10.1990.

6. The appellant-Union, felt aggrieved of the

closure notice issued by respondent No.1, filed

complaint against respondent No.1 under Section

28 read with Items 9 and 10 of the Schedule IV of

the Maharashtra Recognition of Trade Unions and

Prevention of Unfair Labour Practices Act, 1971

(hereinafter referred to as “the Act”) in the Industrial

Court at Pune in October 1990 being

Complaint(ULP) No.544/1990.

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7. In substance, the grievance of the appellant in

their complaint was that since respondent No.1 had

employed more than 100 workers on an average per

working day for preceding 12 months in their

manufacturing unit, the provisions of Chapter VB

(Section 25-K) of the ID Act and, in turn, all the

relevant provisions contained therein were

applicable to respondent No.1. It was alleged that

due to this reason, it was obligatory upon

respondent No.1 to have ensured compliance of all

the relevant provisions applicable for closure of the

Unit. It was alleged that since admittedly the

relevant provisions applicable to closure were not

complied with by respondent No.1, a case was made

out under the ID Act read with the Act to seek a

declaration that the intended closure declared by

respondent No.1, vide their notice dated

29.08.1990, is illegal under the ID Act read with the

Act with a further grant of all consequential reliefs

to each worker arising out of grant of such

4 declaration sought by the appellant in the

Complaint in their favour.

8. Respondent No.1 (employer) filed a reply and

denied therein the allegations made by the

appellant-Union in their complaint. According to

Respondent No.1 they never employed more than

100 workers in their Unit so as to attract the rigor

of Chapter VB and other related provisions of the ID

Act to give effect to the closure. In other words,

according to respondent No.1, the strength of

workers working in their Unit was always less than

100 in number, therefore, the provisions of Chapter

VB and the related provisions of the I.D. Act had no

application to respondent No.1. It was, therefore,

contended that the decision taken by respondent

No.1 to close the Unit with effect from 29.10.1990

was legal, proper and in accordance with law and

hence could not be faulted with.

9. The parties adduced evidence

(documentary/oral) in support of their respective

5 contentions. The Industrial Court, by its award

dated 08.04.2003, allowed the appellant's

complaint. It was held that respondent No.1 had

employed 115 workers at all relevant time in their

Unit, therefore, the provisions of Chapter VB of the

ID Act were required to be followed while effecting

the closure of the Unit. It was held that since the

relevant provisions were not complied with by

respondent No.1, the closure in question was bad in

law entitling the members of the appellant-Union to

claim all consequential benefits arising therefrom as

if there was no closure of the Unit.

10. Respondent No.1 felt aggrieved and filed a writ

petition before the Bombay High Court. By

impugned judgment, the Single Judge allowed the

writ petition and while setting aside of the award of

the Industrial Court dismissed the appellant's

complaint. The High Court held that the total

strength of the workers working at all relevant time

in respondent No.1’s Unit was 99 and not 115 as

6 held by the Industrial Court. It was held that due

to this reason, it was not necessary for respondent

No.1 to ensure compliance of the provisions of

Chapter VB of the ID Act while declaring the closure

of their Unit.

11. The appellant-Union felt aggrieved and filed

the present appeal by way of special leave in this

Court.

12. Heard Mr. B.H. Marlapalle, learned senior

counsel for appellant and Mr. D.J. Bhanage and Mr.

Sanjay R. Hegde, learned senior counsel for

respondents.

13. Having heard the learned counsel for the

parties at length and on perusal of the record of the

case, we find no good ground to interfere in the

impugned judgment of the High Court. In other

words, the reasoning assigned by the High Court

appears to be just and reasonable calling no

interference for the reasons mentioned hereinbelow.

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14. The main question, which arises for

consideration in this appeal, is only one, viz., how

many workers were working in the Unit of

respondent No.1 at all relevant time, whether the

strength of the workers was above 100 or below

100. In other words, the question, which arises for

consideration, is whether the provisions of Section

25-K of Chapter VB of the ID Act were applicable to

respondent No. 1-Unit at the relevant time.

15. If the strength of the workers was above 100 at

the relevant time, in that event, the provisions of

Section 25-K were applicable to respondent No.1

whereas if the strength was below 100, in such

event, the provisions of Section 25K had no

application. In the case of former, the

appellant-Union succeeds and in the case of later,

respondent No.1 succeeds.

16. As mentioned above, the Industrial Court held

that 115 workers were found working at the

relevant time whereas the High Court held that 99

8 workers were found working in the Unit of

respondent No.1 at the relevant time.

17. There can be no dispute to the proposition that

the question as to what is the total strength of the

workers employed in the Unit or, in other words,

how many workers were working in a particular unit

is essentially a question of fact. Such question is

required to be decided by the Courts on

appreciation of evidence adduced by the parties.

18. Once the Courts record a finding on such

question, be that of concurrence or reversal, the

finding is usually held binding on this Court while

hearing the appeal under Article 136 of the

Constitution.

19. It is only when such finding is found to be

against any provision of law or evidence or is found

to be wholly perverse to the extent that no average

judicial person could ever record such finding, it

would not be held binding on the superior Court.

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20. When the question arises as to what is the

status of a “workman”, this Court has held that it

has to be inferred as a matter of law from facts

found and if the question involved is one of drawing

a legal inference as to the status of a party from

facts found, it is not a pure question of fact. It is

held that if the inference drawn by the Tribunal in

regard to the status of the workman involved the

application of certain legal tests, it necessarily

becomes a mixed question of fact and law.

21. This Court has, however, cautioned that it

must be remembered that even if the question

raised is one of the mixed question of fact and law,

this Court would not readily interfere with the

conclusion of the Tribunal unless it is satisfied that

said conclusion is manifestly or obviously

erroneous. (See AIR 1967 SC 428)

22. With a view to examine the question from both

angels which is taken note of above, we perused the

evidence and also called upon the parties to file

10 additional evidence before this Court and it was

filed.

23. Having perused the record, we are not inclined

to interfere in the finding recorded by the High

Court though of reversal. In other words, we are

inclined to agree with the reasoning of the High

Court and accordingly hold that the total strength of

workers employed at the relevant time in

respondent No.1’s Unit was 99 and that the status

of 16 disputed employees could not be conclusively

proved to be that of a “workman” for the reasons

stated infra.

24. First, the High Court assigned the reasons as

to why the finding of the Industrial Court holding

the strength of workers as 115 is not factually and

legally sustainable. Second, the reasons assigned

are neither arbitrary nor against the record and nor

perverse to that event so as to call for any

interference by this Court. Third, in these

circumstances, this Court would be slow to

11 appreciate the entire evidence afresh on this

question in this appeal and lastly, such being a

question of fact or a mixed question of law and fact,

it is binding on this Court.

25. Inspite of this, we have gone through the

evidence with a view to find out as to whether the

High Court has committed any jurisdictional error

in reaching to its conclusion. In our view it is not.

We notice that the Industrial Court held that there

was no dispute regarding the status of 79 workers.

The dispute of status of an employee was confined

only to 36 employees, namely, whether their status

was that of the “worker” or “supervisor”. The

Industrial Court, however, held that the status of all

the 36 employees was that of “worker” and

accordingly recorded a finding that 79+36 = 115

employees were working as “worker” in the Unit at

the relevant time.

26. The High Court, however, while reversing the

aforementioned finding of the Industrial Court came

12 to a conclusion that out of 36 employees, only 20

employees could be regarded as “worker” and,

therefore, the total strength of workers at all

relevant time was 79+20 = 99. In our opinion, the

High Court rightly held that there was no cogent

evidence adduced by the appellant to prove the

status of remaining 16 employees as to whether

they also could be regarded as “worker” employed in

the Unit and, therefore, it was not possible to hold

that the total strength of the workers at the relevant

time was more than 100, i.e., 115.

27. We, while concurring with the reasoning of the

High Court, also find that since the Industrial Court

did not elaborately discuss the issue regarding the

status of 16 employees while holding the strength of

workers at 115 except clubbing 36(20+16) with 79,

the High Court was right in going into the evidence

to the extent permissible and reversed the finding of

Industrial Court. In our view, the Industrial Court

should have examined the status of each such

13 disputed employee independently for holding

whether they could also be regarded as “worker”. It

was, however, not done so.

28. Mr. B.H. Marlapalle, learned senior counsel for

the appellant-Union, strenuously argued with the

help of the entire evidence and the relevant

provisions of the Factories Act, 1948 and the

Payment of Wages Act including the statutory forms

prescribed in the two Acts for filing the details of

workers working in the Unit that the finding of the

Industrial Court appears to be more plausible and

reasonable as compared to the finding recorded by

the High Court on this question and hence the

finding of the Industrial Court deserves to be

restored.

29. We cannot accept this submission of learned

counsel for the appellant in the light of what we

have held above. In our view, the appellant, in order

to prove the status of 16 employees, did not adduce

any cogent evidence as against the evidence of the

14 respondent No.1. It is, therefore, not possible for

this Court to hold that the finding of the High Court

is wholly arbitrary or illegal or against the evidence.

We do not wish to go into this factual question any

more.

30. Learned counsel for the appellant then urged

that the High Court has committed a jurisdictional

error when it went on to re-appreciate the evidence

and then reversed the finding of the Industrial

Court under Article 227 of the Constitution. In our

view, it does not appear to be so.

31. It is the duty of the High Court while

exercising the supervisory jurisdiction to see that

the subordinate Court has exercised its powers in

accordance with law and did not commit any

illegality or perversity in reaching to its conclusion.

32. While recording a finding, if it is noticed by the

High Court that the subordinate Court has failed to

take into consideration the material evidence or

recorded a finding without there being any evidence,

15 then the High Court would be entitled to interfere in

such finding in exercise of its supervisory

jurisdiction under Article 227 of the Constitution.

Such is the case here.

33. In the light of foregoing discussion, we do not

consider proper to disturb the findings recorded by

the High Court which are more plausible and

reasonable rather than that of the Industrial Court.

34. In view of the foregoing discussion, we also

hold that respondent No.1 had employed 99 workers

in their manufacturing Unit at the time of declaring

the closure of the Unit in 1990. Since the strength

of workers was below 100, it was not necessary for

respondent No.1 to ensure compliance of Chapter

VB. In other words, in such circumstances, the

provisions of Section 25-K had no application to

respondent No.1.

35. This takes us to examine the next question as

to how much compensation and under which heads

16 the workers are entitled to receive from respondent

No.1 (Company).

36. Learned counsel for respondent No.1, however,

stated that out of total workers, most of the workers

have settled their claims by accepting the

compensation offered by respondent No.1

voluntarily. Learned counsel stated that the

compensation paid to each worker consisted of (i)

amount of Gratuity payable under the Payment of

Gratuity Act, (ii) closure compensation payable

under the I.D. Act, and over and above these two

statutory payments of compensation, the

respondent No.1 also paid 30 days’ wages for each

completed year of service as ex gratia payment to

each worker. It was also stated that now hardly 16

workers or so remain unpaid because they did not

accept the compensation when offered to them and

preferred to prosecute the present litigation.

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37. Learned counsel for respondent No.1 stated

that the total compensation paid to every worker in

1990-1991 varies between Rs.1 lakh to Rs.2 lakhs.

38. Taking into consideration the aforementioned

background facts and circumstances of the case, we

consider it just and proper to award in lump sum a

compensation of Rs.2,50,000/- (Rs.Two Lakhs and

Fifty Thousand) to each worker who did not accept

the compensation.

39. Let Rs.2,50,000/- (Rs.Two Lakhs and Fifty

Thousand) be paid to each such worker after

making proper verification. If any worker is not

available for any reason, the amount payable to

such worker be paid to his legal representatives or

nearest relatives, as the case may be, after making

proper verification.

40. Respondent No.1 will, accordingly, deposit the

entire compensation payable to all such workers

with details in the Industrial Court, Pune. A notice

will then be served to each worker or his legal

18 representatives, as the case may be, by the

Industrial Court to enable the workers to withdraw

the amount from the Industrial Court.

41. The amount will be paid to every worker or his

nominee as the case may be by the demand draft

issued in his/her name or in the name of legal

representatives, as the case may be. It will be duly

deposited in his/her Bank account to enable

him/her to withdraw the same.

42. The appellant would submit necessary details

of each such worker before the Industrial Court.

The Industrial Court would ensure compliance of

the directions of this Court and complete all

formalities within three months from the date of this

order.

43. We make it clear that this order is applicable

only to those workers who did not accept the

compensation from respondent No.1.

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44. In other words, those workers who already

accepted the compensation will not be entitled to get

any benefit of this order.

45. With these directions, the appeal stands

disposed of finally.

………...................................J. [R.K. AGRAWAL]

…...……..................................J. [ABHAY MANOHAR SAPRE] New Delhi;

January 5, 2018

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