Allowed

Sri Annegowda v. M/S J K Tyres and Industries Ltd.

Karnataka HC19 Feb 2024WP/27850/2018

Case brief

AI extract

What is this about?

A workman claimed he was forced into voluntary retirement after the VR scheme had closed; his withdrawal request was ignored and settlement done later. The High Court found the scheme not in force at application, doubted the voluntariness, relied on precedent allowing withdrawal before final settlement, overturned the Labour Court award and ordered reinstatement.

What did the court decide?

Labour Court award dated 31.10.2017 set aside; petitioner to be reinstated with full back wages and all consequential benefits.

Sri Annegowda Vs M/S J K Tyres and… — Labour and Industrial Disputes | Karnataka HC (2024)

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IN THE HIGH COURT OF KARNATAKA AT BENGALURU

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DATED THIS THE 19^TH DAY OF FEBRUARY, 2024

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BEFORE

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THE HON’BLE MRS. JUSTICE K.S. HEMALEKHA

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WRIT PETITION No.27850/2018 (L-RES)

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BETWEEN:

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SRI ANNEGOWDA S/O. RANGEGOWDA, AGED ABOUT 50 YEARS, R/AT #401, HOSAHUNDI, GSM ASHRAM POST, KASABA HOBLI, BANDIPALYA, MYSORE – 570 025. ... PETITIONER

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(BY SRI K. ANANDARAMA, ADVOCATE)

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AND:

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M/S. J.K. TYRES AND INDUSTRIES LTD., TYRE PLANT, KRS ROAD, METAGALLI, MYSURU – 570 056. REPRESENTED BY CHIEF MANAGER MR. M. ANAND. ... RESPONDENT

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(BY SRI SOMASHEKAR, ADVOCATE)

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THIS WRIT PETITION IS FILED UNDER ARTICLES 226 AND 227 OF THE CONSTITUTION OF INDIA, PRAYING TO CALL FOR RECORDS; SET ASIDE THE AWARD DATED 31.10.2017 (ANNEXURE-H) PASSED BY THE LABOUR COURT, MYSURU IN REFERENCE NO.13/2015 AND CONSEQUENTLY ALLOW REFERENCE NO.13/2015 AND REINSTATE THE PETITIONER WITH FULL BACK WAGES AND ALL CONSEQUENTIAL BENEFITS AND ETC.

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THIS WRIT PETITION HAVING BEEN HEARD AND RESERVED ON 08/02/2024 FOR ORDERS AND COMING FOR PRONOUNCEMENT OF ORDER THIS DAY, THE COURT PRONOUNCED THE FOLLOWING:

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O R D E R

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The point of reference for adjudication under Section 10(1)(c) and (d) of the Industrial Disputes Act, 1947 (‘the ID Act’ for short) reads as under:

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“a) Whether the Workmen Sri. Annegowda represented by the President Mysuru Division, General Labour Union, #41, 1^st Cross, K.N. Pura Mysuru – 570019 proves that the Management, JK Tyres and Industries Ltd., tyre plant KRS road mategalli, Mysuru – 570056 forced him to opt for voluntary retirement with effect from 03.03.2012?”

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2. On reference, the petitioner filed claim statement

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inter alia, contending that the petitioner joined the respondent-management in the year 1991 and was made permanent employee in the year 1993. It is contended that

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the management had introduced the scheme for voluntary retirement vide Circular dated 17.12.2011 which was in force upto 16.01.2012, it is the case of the petitioner that the petitioner was forced to submit his application for voluntary retirement after the scheme has come to an end and even

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though the petitioner was unwilling. It is the case of the petitioner that he, his wife and his relative approached the General Manager on the very day, i.e., 27.02.2012 not to accept the application and that the petitioner had also sent a representation on 03.03.2012 through registered post seeking to withdraw the alleged VR application, the respondent-management instead of accepting the withdrawal application, on 05.03.2012, sent a letter along with the cheque of Rs.2,25,103/- stating that the management is reliving the petitioner under the VR scheme. The petitioner contended that the acceptance of voluntary retirement application was violative of his fundamental rights.

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The respondent-management appeared and filed counter statement, inter alia, contending that the application for VR scheme on 27.02.2012 was submitted by the petitioner and the same was accepted by the management, and towards the final settlement, the amount was credited to his SB account. It is the case of the respondentmanagement that the acceptance of VR scheme

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was communicated to the petitioner even before the petitioner and his wife sought for revoking the VR application.

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Before the Labour Court the petitioner examined himself as W.W.1 and three witnesses as W.W.2 to W.W.4, namely,

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i) His brother in law;

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ii) Wife and

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iii) C. Raju, who was earlier working with the management

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And got marked documents at Exs.W.1 to W.23. On

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the other hand, the management examined the Chief Manager (HR) and IR as M.W.1 and got marked documents at Exs.M.1 to M.12.

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The Labour Court by the impugned order proceeded on the premise that Ex.M.5/W.12-application of the petitioner requesting to transfer the benefits to his wife’s account and held that the combine reading of said exhibits makes it clear that the VR application was voluntarily

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submitted and by the impugned award dismissed the reference and the claim statement.

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Heard Sri K. Anandarama, learned counsel for the petitioner and Sri Somashekar, learned counsel for the respondent.

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Learned counsel for the petitioner would contend

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that the VR scheme was introduced by the management vide Circular dated 17.12.2011 (Ex.W.7/M.1) and the scheme was in force upto 16.01.2012 and the application submitted by the petitioner under the VR scheme was on 27.02.2012 much after the closure of the scheme. Learned counsel would contend that the acceptance of the VR scheme on the very same day of filing the application would show the amount of pressure the management has imposed on the petitioner. Learned counsel would take this Court to the various exhibits, more particularly Ex.W.10, W.12/Ex.M.5, Ex.M.3, Ex.M.6, Ex.M.7 and Ex.M.8 to contend the circumstances to

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show that the VR application was forced upon the petitioner

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and the petitioner had withdrawn his application submitted under VR Scheme on 03.03.2012 would contend that the acceptance of his offer to voluntarily retirement being subject to adjustment of the amount payable to the petitioner, the same had not attained finality, when the petitioner had made representation for withdrawal of his VR application.

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Per contra , learned counsel appearing for the respondent would contend that the petitioner had voluntarily submitted the prescribed application and the management decided to accept the application of the petitioner under the scheme. It is stated that the representation dated 03.03.2012 which was received by the management on 03.03.2012 avers that the application under the scheme is entirely voluntary and request for settlement of the amount to be transferred to his wife, clearly indicates that the petitioner was not interested in withdrawing VRS application from the scheme on 27.02.2012. It is stated that pursuant to the VR scheme the calculation of settlement due to the

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petitioner has been sent to the petitioner. It is further stated

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that the Labour Court has rightly rejected the reference and claim statement, which does not warrant any interference.

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Having heard the learned counsel for the parties, the questions that fall for consideration before this Court are:

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“1. Whether the scheme of voluntary retirement was voluntarily accepted by the petitioner and reliving the petitioner under VR scheme was justified?

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2. Whether the VR scheme was in force when the application was submitted?”

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This Court has carefully considered the rival contentions urged by the learned counsel for the parties and perused the material on record.

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Petitioner was appointed in the respondent establishment as “Truck/Rear Tractor Tyre Builder”. The respondent-management introduced voluntary retirement scheme (VR Scheme) which was in force with immediate effect from 17.12.2011 to 16.01.2012. The applicability and

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commencement of VR Scheme for employees of Vikrant Tyre Plant was upto 16.01.2012. The terms and conditions of the

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VR Scheme was that, the employees desires of opting for Voluntary Retirement under the scheme should make an application in the prescribed form, which will be available with the personnel department. The condition stated that the application should be completed, signed and submitted to the Personnel Department during the period the scheme is in force. Further, the acceptance or rejection of the application shall be communicated to the employee within reasonable time by the management in its letter.

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As stated supra, the application for VR was dated 17.12.2011, the respondent before the Labour Court in his counter statement contended at paragraph No.2 as under:

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“2. Even otherwise, the claim does not survive on merits of the case. The I Party has contradicted his own statement in the petition filed in IID 11/2012 and in the Claim Statement filed in this reference. It is not true that the I Party was discharging his duties

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honestly and sincerely as he was a chronic absentee. A voluntary retirement scheme was in vogue in the II Party establishment. It is incorrect to state that the scheme was withdrawn by the Management as stated in the Claim Statement. As per the prevailing scheme, the I Party gave a representation on 27.02.2012 seeking voluntary retirement. It is false and baseless to state that there was some misunderstanding among the employees and the Union leaders of the II Party as avered by the I Party. It is also false to state that the Union had control on the workmen for their own benefits and failed to look after the welfare of the workmen of the II Party. Further, it is false to state that the workmen are harassed by the office bearers of the Union. On the contrary, it is only the I Party who has come up with this false contention in order to protect his own interest in the present case. The allegations against the Union at para 3 & 4 of the Claim Statement are highly uncharitable and devoid of facts. In the petition filed in IID 11/12, the I Party has contended that he submitted an application seeking voluntary retirement due to work pressure from his superiors. Further, he has stated that he was suffering from mental pressure and he had undergoing treatment. He also stated that he along with his wife and children approached the Management and requested not to act on the application given by him. Further, he has stated that the Management had

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assured him, his wife and children that no action would be taken on the application and they were asked to meet after 3 days. He claimed that he received an anonymous call from somebody threatening that he should not withdraw the application. He has contradicted all these versions in the present Claim Statement.”

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(Emphasis supplied)

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The respondent-management, along with the

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objections, have produced Annexure-R2 to contend that the VR scheme dated 17.12.2011 vide Circular dated 10.02.2012

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was extended to 15.03.2012. Perusal of Annexure-R2 indicates that the VR Scheme revises the compensation payable under the scheme, which is a completely different scheme and only for the payment of revised compensation. It is nowhere mentioned in the application submitted by the petitioner about the circular dated 10.02.2012 for having extended the scheme nor in the objection statement of the respondent-management to that effect. The settlement of dues as per Ex.M.8 dated 05.03.2012 does not show the package amount as per Annexure-R2, which clearly indicates that Annexure-R2

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is nothing but an afterthought to come into the purview of eligibility for submitting the application.

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The alleged VR application was submitted on 27.02.2012, the management accepted and relieved the petitioner from services on 27.02.2012 itself, it is evident from clause 3(b) of the VR Scheme dated 17.12.2011 that the scheme was not in force when the application was submitted by the petitioner, admittedly, the scheme was in force only till 16.01.2012.

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The Clause 8 (b) to (d) of the VR Scheme provides that the application should be submitted during the period of the scheme in force and the acceptance and rejection shall be communicated to the employee within a reasonable time after receipt of the application and the acceptance by the management of the employee’s application for voluntary retirement under the scheme, the concerned employee will cease to be in the service of the company with effect from the date indicated by the

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management in its letter accepting the employee’s

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application for voluntary retirement.

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The application submitted by the petitioner and the acceptance of the application by the management on the same day create doubt in the mind of the Court about the voluntary submission of the application as could be seen from the VR application, it is endorsed by the member of the Union accepting the application and M.W.1 categorically states that consent/opinion of the employees union is not required and not to be obtained for considering the VRS application.

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Even the acceptance letter refers to VRS Circular dated 17.12.2011 and not Annexure-R2, the letter of acceptance of the VR application was not served on the petitioner and was returned to the management on 08.03.2012, since the addressee/petitioner was not at his address, the reasons being that from 03.03.2012 to 07.03.2012, the wife of the petitioner was admitted to the hospital for an attempt of suicide.

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The circumstances which creates doubt in the

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mind of the Court are:

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(a) Ex.M.5 – is the letter said to be given by the

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petitioner to settle his dues and transfer the amount to his wife’s account. Perusal of Ex.M.5 indicates as under:

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i. Ex.M.5 there is an endorsement of the union just like one found in VRS application;

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ii. Ex.M.5 does not mention the date of the letter however at top of the front page states ‘only front sheet received on 03.03.2012’ even before the settlement the petitioner submitted his letter seeking withdrawal of VR application and specifically stated that grounds for his withdrawal and the accounts were settled only on 05.03.2012.

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iii. Regarding the witness to Ex.M.5 and endorsement by the union, no explanation is offered by the management, on the other hand, management witness-M.W.1 has categorically in unequivocal terms stated that there is no

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procedure to obtain signature of trade union, while VRS application is submitted.

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iv. Ex.M.5 neither mentions about the account

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number of his wife, which circumstance is highly improbable as when a person wants the benefits to transfer to a particular, all endeavour would be done to mention the details.

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v. Ex.M.5 is silent about when such transfer is sought to his wife’s account, when procedure is to settle the accounts of the employee to his account.

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(b) Ex.M.6 and M.7 are withdrawal letters written by

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the petitioner and his wife on 03.03.2012 stating the circumstances under which application was submitted and the reasons for withdrawal of VR application.

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(c) Acceptance of the VR application dated 27.02.2012 by management is not served on the petitioner and postal endorsement was returned with a shara on the cover ‘Addressee always absent during delivery time. Hence returned to sender”. The petitioner absence during

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03.03.2012 to 07.03.2012 was in light of the fact that his wife attempted to commit suicide and she was admitted in hospital as is evident from Ex.W.16 – 2^nd Form and Ex.W.17. Interesting aspect is that the settlement of accounts of the alleged VR application was by enclosing the cheques dated 05.03.2012 drawn on Syndicate Bank, Main Branch, Mysore of the petitioner to the Manager, Syndicate Bank for remittance of final settlement amount in respect of the petitioner.

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(d) The financial settlement of the petitioner under VRS is not on the day his signature are taken but later on as is evident from Ex.M.8, while financial settlement under VRS to similar employees indicate the workman’s signature is obtained on full and final settlement, computation after adjustment, if any, which clearly finds place at Ex.W.21 and W.22.

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(e) The other circumstance is the settlement of dues at Ex.M.8 dated 05.03.2012 was in favour of Syndicate Bank, Cheque drawn on Syndicate Bank towards full and final

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settlement of Mr. Annegowda, which is an unexplained part by the management about settling the dues by drawing cheque on the Bank.

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The Apex Court held when a valid reason is made out for withdrawal, the withholding is not valid. The Apex Court in the case of Balram Gupta Vs. Union of India and another¹ (Balram Gupta) has held at paragraph Nos.12 and 13 as under:

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“12. In this case the guidelines are that ordinarily permission should not be granted unless the officer concerned is in a position to show that there has been a material change in the circumstances in consideration of which the notice was originally given. In the facts of the instant case such indication has been given. The appellant has stated that on the persistent and personal requests of the staff members he had dropped the idea of seeking voluntary retirement. We do not see how this could not be a good and valid reason. It is true that he was resigning and in the notice for resignation he had not given any reason except to state that he sought voluntary retirement. We see nothing wrong in this. In the

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1 (1987 (Supp) SCC 228

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modern age we should not put embargo upon people’s choice or freedom. If, however, the administration had made arrangements acting on his resignation or letter of retirement to make other employee available for his job, that would be another matter but the appellant’s offer to retire and withdrawal of the same happened in such quick succession that it cannot be said that any administrative set up or management was affected. The administration has now taken a long time by its own attitude to communicate the matter. For this the respondent is to blame and not the appellant.

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13. We hold, therefore, that there was no valid reason for withholding the permission by the respondent. We hold further that there has been compliance with the guidelines because the appellant has indicated that there was a change in the circumstances, namely, the persistent and personal requests from the staff members and relations which changed his attitude towards continuing in Government service and induced the appellant to withdraw the notice. In the modern and uncertain age it is very difficult to arrange one’s future with any amount of certainty; a certain amount of flexibility is required, and if such flexibility does not jeopardize government or administration, administration should be graceful enough to respond and acknowledge the flexibility of human mind and attitude and allow the

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appellant to withdraw his letter of retirement in the facts and circumstances of this case. Much complications which had arisen could have been thus avoided by such graceful attitude. The court cannot but condemn circuitous ways “to ease out” uncomfortable employees. As a model employer the government must conduct itself with high probity and candour with its employees.”

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The manner in which the application is submitted, accepted, amount paid, the act on the part of the management and the material on record would indicate that the petitioner, though having opted for voluntary retirement, had sought to withdrew the same immediately. The petitioner has stated that he, his wife and his relative were persistently seeking to drop the voluntary retirement. The submission and acceptance of the application of VR were done in a quick and haste manner and the employer should have conducted himself in a proper manner when the petitioner wanted to withdraw the voluntary retirement.

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Further, clause 8(j) of VR scheme mentions that

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the reliving of the employee under the VR scheme is subject

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to clearance/adjustment of all his dues and therefore, any acceptance prior to settling the financial dues is only conditional. The Apex Court in the case of Bank of India and others Vs. O.P. Swarnakar and Others² (Swarnakar) considering the Balram Gupta’s case stated supra and Shambhu Murari Sinha Vs. Project and India Limited and another³ (Shambhu Murari Sinha) has held at paragraph No.102, 106, 111 and 120 as under:

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“102. In Balram Gupta case this court was dealing with Central Civil Services (Pension) Rules, 1972 which is a statutory rule. Sub-rule (4) of Rule 48-A prevented withdrawal of resignation letter except with the approval of the authority. The validity of the said rule was not in question. In that case the approval of the authority to withdraw was not given. It was in the aforementioned situation observed: (SCC p. 232, para 8)

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"That has been done. The approval of the authority was, however, not given. Therefore, the normal rule which prevails in certain cases that a person can withdraw his resignation before it is effective would not apply in full force to a case of

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2 (2003) 2 SCC 721

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3 (2002) 3 SCC 437

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this nature because here the government servant cannot withdraw except with the approval of such authority".

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106. In Power Finance Corpn. Ltd. v. Pramod Kumar Bhatia a scheme of voluntary retirement was floated and pursuant thereto the respondents therein had applied for voluntary retirement but subsequently the Corporation had withdrawn the Scheme although the offer had been accepted. Such acceptance was to take effect from 31-12-1994. This court held that the acceptance of his offer to voluntarily retire being subject to adjustment of the amount payable to him, the same did not attain finality. It was held: (SCC p.282, para 7)

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"7. It is now settled legal position that unless the employee is relieved of the duty, after acceptance of the offer of voluntary retirement or resignation, jural relationship of the employee and the employer does not come to an end. Since the order accepting the voluntary retirement was a conditional one, the conditions ought to have been complied with. Before the conditions could be complied with, the appellant withdrew the scheme. Consequently, the order accepting voluntary retirement did not become effective. Thereby no vested right has been created in favour of the

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respondent. The High Court, therefore, was not right in holding that the respondent has acquired a vested right and, therefore, the appellant has no right to withdraw the scheme subsequently".

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111. In Shambhu Murari Sinha case it was held: (SCC pp. 442-43, para 18)

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"18. Coming to the case in hand the letter of acceptance was a conditional one inasmuch as, though option of the appellant for the voluntary retirement under the Scheme was accepted but it was stated that the ‘release memo along with detailed particulars would follow’.

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Before the appellant was actually released from the service, he withdrew his option for voluntary retirement by sending two letters dated 7-8-1997 and 24-9-1997, but there was no response from the respondent. By office memorandum dated 259-1997 the appellant was released from the service and that too from the next day. It is not disputed that the appellant was paid his salaries etc. till his date of actual release i.e. 26-9-1997, and, therefore, the jural relationship of employee and employer between the appellant and the respondents did not come to an end on the date of acceptance of the voluntary retirement and the said

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relationship continued till 26-9-1997. The appellant admittedly sent two letters withdrawing his voluntary retirement before his actual date of release from service. Therefore, in view of the settled position of the law and the terms of the letter of acceptance, the appellant had locus poenitentiae to withdraw his proposal for voluntary retirement before the relationship of employer and employee came to an end".

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120. We also accept the contention raised by the learned counsel for the respondents that the appellants concerned could not have accepted the offer of voluntary retirement after expiry of the scheme. All actions by the Banks were required to be taken strictly in terms of the said scheme.”

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(Emphasis supplied)

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The legal position in the decisions stated supra is

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that the acceptance of the offer is subject to the adjustment/conditions complied, the same would not attain finality and could be revoked or withdrawn before attaining finality. The order accepting VR application was a conditional one, on the settlement of VRS compensation which came to be settled according to management itself on 05.03.2012.

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The Labour Court proceeded on Ex.M.5/W.12 on the sole premise that the petitioner has requested to transfer the benefits to his wife’s account, this Court has already opined on the genuineness of Ex.M.5 and the Labour Court has totally lost sight of Exs.M.6/W.3, M.7-W.11, M.8, W.16, W.17 and the non-consideration has led to perversity and unsustainability of the order.

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The circumstances narrated above speak volumes about the amount of pressure on the workman and in spite of seeking withdrawal of the VR application for personal reasons, the management has gone to the extent of reliving the workman and the Labour Court has totally misled itself, making this Court warrant interference.

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For the foregoing reasons, the point framed for consideration is answered in favour of the petitioner and consequently, this Court pass the following:

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ORDER

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i. Writ petition is allowed .

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ii. Impugned order of the Labour Court accepting the VR scheme application is set aside and the respondent-management is directed to reinstate the petitioner with full backwages and all consequential benefits.

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SD/JUDGE

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MBM

Sri Annegowda v. M/S J K Tyres and Industries Ltd.

Case brief

What is this about?

What did the court decide?

Sri Annegowda v. M/S J K Tyres and Industries Ltd.

Case brief

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What did the court decide?

What the court decided

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