Dismissed

M/S Hemavathi Sahakari Sakkere Karkhane Ltd. v. Sri Ramachandra

Karnataka HC9 Sept 2024WP/26330/2019

Case brief

AI extract

What is this about?

A sugar factory challenged a Labour Court award granting back wages to six employees under Section 33(c)(2) of the ID Act for the period their regularization order lay in abeyance. Holding an abeyance order does not extinguish employee rights, the High Court dismissed the petition and confirmed the award for surviving respondents.

What did the court decide?

Labour Court award confirmed; balance of back wages payable to respondent Nos. 2, 4, 5 and 6 within three months after deducting sums already paid; deposited amount transferred to Labour Court.

M/S Hemavathi Sahakari Sakkere Karkhane… — Labour and Industrial Disputes | Karnataka HC (2024)

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NC: 2024:KHC:37091 WP No. 26330 of 2019

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IN THE HIGH COURT OF KARNATAKA AT BENGALURU

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DATED THIS THE 9^TH DAY OF SEPTEMBER, 2024 BEFORE

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THE HON'BLE MRS JUSTICE K.S. HEMALEKHA

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WRIT PETITION NO.26330 OF 2019 (L-RES)

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BETWEEN:

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M/S. HEMAVATHI SAHAKARI SAKKERE KARKHANE LTD., SRINIVASAPURA, CHANNARAYAPATNA TALUK, HASSAN DISTRICT – 573 116. REPRESENTED BY ITS MANAGING DIRECTOR.

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... PETITIONER

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(BY SRI CHANDRACHUD A., ADVOCATE)

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AND:

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Digitally signed by MAHALAKSHMI B M Location: HIGH COURT OF KARNATAKA

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SRI RAMACHANDRA, S/O. NARASACHAR, AGED ABOUT 53 YEARS,

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SRI M.N. CHANDRE GOWDA, S/O. NANJUNDE GOWDA, AGED ABOUT 53 YEARS,

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SRI J.D. RAMAKRISHNA, S/O. DEVEGOWDA, AGED ABOUT 51 YEARS,

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SRI NAGEGOWDA, S/O. SHIVANANJEGOWDA, AGED ABOUT 55 YEARS,

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SRI M.H. RAMESH, S/O. HOOVANACHAR, AGED ABOUT 53 YEARS,

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ALL ARE EMPLOYEES OF HEMAVATHI SAHAKARI SAKKARE KARKHANE LTD., SRINIVASAPURA – 573 116, CHANNARAYAPATNA TALUK, HASSAN DISTRICT.

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CHAMUNDESHWARI SUGAR LTD., SRINIVASAPURA, CHANNARAYAPATNA TALUK, HASSAN DISTRICT. REPRESENTED BY ITS MANAGING DIRECTOR.

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... RESPONDENTS

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(BY SRI. B.N.VINOD KUMAR, ADVOCATE FOR SRI. BIPIN HEGDE., ADVOCATE FOR R1 AND R6; SRI.S.SANTHOSH NARAYAN, ADVOCATE FOR R7)

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THIS WRIT PETITION IS FILED UNDER ARTICLES 226 AND 227 OF THE CONSTITUTION OF INDIA PRAYING TO CALL FOR THE RECORDS FROM THE PRESIDING OFFICER, LABOUR COURT, AT CHIKKAMAGALUR AND QUASH THE ORDER DATED 22.04.2017 PASSED IN APPLICATION NO.1/2013 BY THE PRESIDING OFFICER, LABOUR COURT, AT CHIKKAMAGALURU VIDE ANNEXURE-P AND ETC.

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THIS PETITION, COMING ON FOR FURTHER HEARING, THIS DAY, ORDER WAS MADE THEREIN AS UNDER:

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CORAM: HON'BLE MRS JUSTICE K.S. HEMALEKHA

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ORAL ORDER

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Assailing the legality and correctness of the order dated 22.04.2017 in application No.1/2013 on the file of the Presiding Officer, Labour Court at Chikkamagaluru (hereinafter referred to as 'Labour Court' for the sake of convenience), wherein, the application under Section 33(c)(2) of the Industrial Disputes Act, 1947 (‘ID Act’ for short) was allowed and respondents No.1 to 6 were held to be entitled for back wages from July, 1997 upto 2007 with 9% interest per annum from the date of application until its realization.

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Application was filed by respondent Nos.1 to 6 under Section 33(c)(2) of the ID Act, contending that the Commissioner for Cane Development and Director for Sugar, (‘Cane Commissioner’ for short) has passed an order dated 03.06.1997 directing the petitioner to regularize the services of respondents No.1 to 6 against permanent (regular) post and sought for monetary

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NC: 2024:KHC:37091 WP No. 26330 of 2019

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benefits from 30.01.1992 along with interest at the rate of 18% per annum.

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The petitioner filed objections to the said application contending that respondents No.1 to 6 are not eligible for monetary benefits from 30.01.1992, since order dated 03.06.1997 was kept in abeyance by the Cane Commissioner and the same was lifted only in the year 2007, as such, they are not entitled for the monetary benefits for the period when the order of regularization was kept in abeyance and sought for dismissal of the application.

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Before the Labour Court, respondent Nos.1 to 6 adduced evidence by examining themselves as PW.1 to PW.6 and marked documents at EXs.P1 to P12. On the other hand, the petitioner examined one

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Sri Govindagowda as RW.1 and marked documents at EXs.R1 to R28.

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The Labour Court by the impugned award

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allowed the application holding that respondent Nos.1 to 6 are entitled for back wages from July, 1997 upto 2007 with interest at the rate of 9% p.a. from the date of application till realization which reads as under :

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Petitioner No.1 Sri Ramachandra Rs.3,43,804-00 Petitioner No.2 Sri M N Chandregowda Rs.3,39,804-00 Petitioner No.3 Sri N N Gopal Rs.3,39,804-00 Petitioner No.4 Sri J D Ramakrishna Rs.3,43,804-00 Petitioner No.5 Sri Nagegowda Rs.3,39,804-00 Petitioner No.6 Sri M H Ramesh Rs.3,39,804-00

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It is brought to the notice of this Court that petitioner No.1 - applicant No.1 - Sri Ramachandra had filed a memo seeking to not press the application filed by petitioner No.1 and accordingly, the memo was accepted and the petition was dismissed as not pressed in so far as applicant No.1 - Ramachandra was concerned. The respondent No.3 – N.N. Gopal (applicant No.3 before the Labour Court) had filed a memo before this Court seeking to withdraw his claim, accordingly respondent No.3 -

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applicant No.3 has been deleted from the present petition and thus, the petition survives in respect of respondent Nos.2, 4, 5 and 6.

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Learned counsel appearing for the petitioner

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reiterating the various contentions raised in the writ petition would mainly urge that the respondents are not entitled for any monetary benefits as directed by the Labour Court from 03.06.1997, as the order of the Cane Commissioner dated 03.06.1997 directing regularization of the respondents into service was kept in abeyance and thereafter, the order of the Cane Commissioner was lifted only on 31.05.2007 and the respondents are not entitled for any wages from 03.06.1997 to 11.05.2007.

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Respondent No.7 by filing statement of objections has supported the contentions raised by the petitioner and mainly contend that the petitioner has leased out the factory after obtaining necessary approval from the Government of Karnataka, respondent No.7 being the successful bidder was provided with the lease by

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NC: 2024:KHC:37091 WP No. 26330 of 2019

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the petitioner from the period commencing from 26.10.2007 for a period of 30 years and that there is no direction by the Cane Commissioner to respondent No.7 and the directions issued by the Cane Commissioner on 03.06.1997 to regularize the service of the respondents is not applicable to respondent No.7 as the lease was entered only on 26.10.2007 and not prior to it.

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Respondent Nos.1 to 6-applicants have filed their objections and in support of the objections filed, learned counsel for the respondents - applicants submits that the Cane Commissioner has passed an order regularizing the services of respondent Nos.1 to 6 on 03.06.1997 and the respondent Nos.1 to 6 are entitled for back wages from 03.06.1997. It is contended that the Labour Court by appreciating the entire material placed before it has directed back wages from 1997 till the lifting of the orders and the same does not warrant any interference by this Court and sought for dismissal of the petition.

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Having heard the learned counsel for the parties

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the point that arises for consideration is,

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"Whether the order of abeyance by the Commissioner for Cane Development would disentitle the applicants seeking monetary benefits, when the Commissioner for Cane Development has regularized the services of the applicants on 03.06.1997 ? "

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This Court has carefully considered the rival

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contentions urged by the learned counsel for the parties and perused the material on record.

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Respondent Nos. 1 to 6 filed a petition under Section 70(1)(e) and (2) of the Karnataka Co-Operative Societies Act, 1959 to declare them as permanent employees of the petitioner-factory by contending that they were appointed w.e.f. 30.01.1992 and they were discharging the duties and they come under the category

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of permanent employees and that the petitionerestablishment is a factory as per Section 2(j) of the ID Act, and respondents Nos.1 to 6 – applicants are workmen

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as per Section 2(s) of the ID Act. The said dispute was allowed by the Cane Commissioner by order dated 03.06.1997. The said order directed the petitioner to regularize the services of respondents No.1 to 6 against the permanent (regular) post and that the petitioner should follow the roster system for reservation of the said posts. The relevant portion of the order passed by the Cane Commissioner reads as under -

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"The Managing Director of the Karkhane is hereby directed to find out the number of backlog vacancies category-wise in the 'permanent' and 'seasonal permanent' categories of sanctioned and filled up posts and take action to fill them up as per the relative Government Order and Policy of Government. He shall not make appointments of candidates belonging to any other categories until and unless the backlog vacancies meant for Scheduled Castes and Scheduled Tribes are fill up by following the procedure laid-down by the Government in this behalf."

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10 -

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NC: 2024:KHC:37091 WP No. 26330 of 2019

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Appeal was preferred by the petitioner in Appeal No.494/1997 before the Appellate Tribunal, The Tribunal framed the following points for consideration-

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“i. Whether the impugned orders pertaining to the main dispute and also the impugned order keeping the main order in dispute under abeyance are sustainable in law?

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ii. What Order?”

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The Appellate Tribunal by the order dated 22.02.2000, dismissed the appeal preferred by the petitioner.

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While answering point No.1, the Appellate Tribunal gave finding which reads as under:

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“We also do not with the arguments raised by the counsel for the respondents that the Appeal is not maintainable on the ground that the Director has kept his own order under abeyance. Because, the abeyance order issued by the Director is for a limited specific purpose of filling up of the backlog vacancies. We, therefore, do not see any valid grounds to interfere with the lower court orders. Further,

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there is a delay of 14 days in filing the present Appeal and sworn to the affidavit by the appellant, it had been averred that the appellant factory has received the impugned order on 9.6.1997 and the modified order communicating the abeyance order unier dispute has been received on 11.06.1997. The limitation period expires on 10.8.1997. The Appeal came to be filed on 9/10-8-1997 and since these two days were Holidays on account of second Saturday and Sunday and the delay has been due to unavoided circumstances and because of administrative reasons, exigencies and discussions by the Advocate for opinion, the delay of 14 days has been occasional. After hearing the counsels for the appellant - factory and the reasons put-forth by the appellant are considered and we condone the delay.”

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(Emphasis supplied)

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The Tribunal arrived at a conclusion that the

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abeyance order issued by the Cane Commissioner is for a limited/specific purpose of filling up the backlog vacancy and therefore, it did not find any valid grounds to interfere

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with the Labour Court order and by the order dated

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22.02.2000 dismissed the appeal preferred by the petitioner.

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The order directing regularization in favour of the respondents No.1 to 6-applicants has attained finality way back in the year 2000. The term "abeyance" refers to a state of temporary inactivity or suspension, when an order is kept in abeyance, it does not negate the rights of the affected party. For instance, in the case of recruitment or disciplinary actions the right of the employees may still be preserved until the final decision is made. The entitlement of benefits under regularization is often contingent upon the specific terms of the regularization order. If the order is lifted, the employees be entitled to the benefits from the date of regularization order, depending on the context and stipulations as outlined in the order. The affected workman indeed would be entitled for the benefits from the date of regularization, once the abeyance is lifted, the principle being while an order is in abeyance, the rights of the employee are not

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extinguished, but rather held in suspension and it can be emphasized that any benefits that are due should be honored once a regularization is formally enacted. The Courts should be inclined towards protecting the employees' right during the period of administrative uncertainty. The order of the Cane Commissioner was lifted on 31.05.2007, meaning that the petitioner has to regularize the posts of the respondents and implement the order passed by the Cane Commissioner. The Labour Court analyzing the entire oral and documentary evidence has held that the respondents –applicants are entitled for regularization of services from 03.06.1997. The perusal of the impugned order does not suffer from any perversity or illegality warranting any interference by this Court and the point framed for consideration is answered against the petitioner and in favour of the applicants and hence, this Court pass the following:-

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ORDER

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i. The writ petition is dismissed .

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ii. The impugned order passed by the Labour Court stands confirmed, making it clear that the order of regularization dated 03.06.1997 is to be implemented in respect of respondent Nos.2, 4, 5 and 6.

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iii. It is made clear that any amount already paid during the period from 03.06.1997 to 31.05.2007 to be deducted and the balance amount entitled by the respondents-applicants to be paid by the petitioner within a period of three months.

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iv. The amount in deposit before this Court pursuant to the interim order granted by this Court to be transferred to the concerned Labour Court.

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Sd/(K.S. HEMALEKHA) JUDGE

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YKL

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List No.: 1 Sl No.: 17

M/S Hemavathi Sahakari Sakkere Karkhane Ltd. v. Sri Ramachandra

Case brief

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M/S Hemavathi Sahakari Sakkere Karkhane Ltd. v. Sri Ramachandra

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