Dismissed

Sri.Guruprasad S L v. M/S Karnataka Malladi Biotics Ltd.

Karnataka HC27 Aug 2024WP/57049/2015

Case brief

AI extract

What is this about?

High Court dismissed writ petitions challenging an Industrial Tribunal award. The Court held that the respondent did not employ more than 100 workmen on an average per day in the preceding 12 months, thus prior permission for retrenchment was not required. Consequently, the Tribunal's rejection of the reference was correct and confirmed.

What did the court decide?

Writ petitions dismissed; impugned orders passed by the Industrial Tribunal confirmed.

Sri.Guruprasad S L Vs M/S Karnataka Malladi… — Labour and Industrial Disputes | Karnataka HC (2024)

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1 - NC: 2024:KHC:34397 WP No. 57049 of 2015 C/W WP No. 17692 of 2018

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IN THE HIGH COURT OF KARNATAKA AT BENGALURU

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DATED THIS THE 27^TH DAY OF AUGUST, 2024 BEFORE

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THE HON'BLE MRS JUSTICE K.S. HEMALEKHA

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WRIT PETITION NO.57049 OF 2015 (L-TER)

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C/W

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WRIT PETITION NO.17692 OF 2018 (L-TER)

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IN W.P. NO.57049/2018

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BETWEEN:

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SRI GURUPRASAD S.L. AGED ABOUT 40 YEARS, S/O. K. LINGAIAH,

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SRI HANUMANTHU T. AGED ABOUT 43 YEARS, S/O. THAMME GOWDA,

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SRI PRASANNA Y.K. AGED ABOUT 47 YEARS,

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S/O. HANUMAIAH ALIAS KARIAPPA,

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

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SRI MAHESHA B.V. AGED ABOUT 47 YEARS, S/O. VENKATE GOWDA,

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SRI HANUMESHA K.C. AGED ABOUT 39 YEARS, S/O. CHIKKANNA,

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SRI LAKSHMI NARASHIMAIAH AGED ABOUT 53 YEARS, S/O. HOBHALAIAH,

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SRI SHANKAR AGED ABOUT 43 YEARS, S/O. MARIDEVAIAH,

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SRI HANUMANTHE GOWDA K.H. AGED ABOUT 46 YEARS, S/O. HANUMEGOWDA,

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SRI THIMAPPA H.T. AGED ABOUT 44 YEARS, S/O. THIMMAIAH,

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SRI KUMARA .J AGED ABOUT 48 YEARS, S/O. JAVAREGOWDA,

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SRI LINGAPPA, AGED ABOUT 45 YEARS, S/O. MARIGOWDA,

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SRI HANUMANTHAIAH Y.V. AGED ABOUT 41 YEARS, S/O. VENKATESH,

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SRI SOMASHEKAR, AGED ABOUT 43 YEARS, S/O. BASAVAIAH,

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SRI NARENDRA D.N. AGED ABOUT 44 YEARS, S/O. NARASIMHEGOWDA,

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SRI MANOHARAN AGED ABOUT 49 YEARS, S/O. RAJAIAH,

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SRI RAMESHA Y.M. AGED ABOUT 41 YEARS, S/O. MADEGOWDA,

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SRI BASAVARAJA T.P. AGED ABOUT 38 YEARS, S/O. PUTTEGOWDA,

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SRI SHANKARA Y.C. AGED ABOUT 46 YEARS, S/O. CHIKKLINGAIAH,

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SRI RAVI .N AGED ABOUT 41 YEARS, S/O. NAGAIAH,

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SRI VERANNARADHAYA .K AGED ABOUT 49 YEARS, S/O. KUMARARADHYA

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SRI MAYAPPA AGED ABOUT 48 YEARS, S/O. MAYIGASHETTY,

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SRI SHANKAR Y.H. AGED ABOUT 46 YEARS, S/O. PIDEGOWDRU HANUMAIAH

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SRI RAVIKUMARA S.A. AGED ABOUT 42 YEARS, S/O. ANKEGOWDA,

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SRI PANCHALINGA K.P. AGED ABOUT 40 YEARS, S/O. PANCHEGOWDA,

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SRI NAGARAJ AGED ABOUT 47 YEARS, S/O. CHIKKAPUTTEGOWDA,

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SRI NARASHIMAMURTHY S.N. AGED ABOUT 51 YEARS, S/O. LAKSHMINARAYANA,

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SRI MAHADEVAPPA H.N. AGED ABOUT 49 YEARS, S/O. NINGAPPA,

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SRI SHIVALINGEGOWDA AGED ABOUT 42 YEARS, S/O. H. NINGEGOWDA,

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SRI VENKAPPA TALWAR AGED ABOUT 42 YEARS, S/O. AYYAPPA TALWAR,

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SRI SHIVAKUMAR SWAMY .B AGED ABOUT 57 YEARS, S/O. C. BASAVARAJAPPA,

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SRI KEMPEGOWDA AGED ABOUT 43 YEARS, S/O. SIDDAIAH,

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SRI SHIVARAJU AGED ABOUT 42 YEARS, S/O. PUTTASHETTY,

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SRI HANUMANTHA Y.C. AGED ABOUT 48 YEARS, S/O. MOLLEKENCHANA DEVAIAH,

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SRI MALLESHA K.M. AGED ABOUT 43 YEARS, S/O. MALLAIAH,

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SRI NARASHIMARAJU S.C. AGED ABOUT 57 YEARS, S/O. CHIKKADASAHEGGADE,

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SRI MANJU K.C. AGED ABOUT 45 YEARS, S/O. CHOWDEGOWDA

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SRI SHIVARAJU .K AGED ABOUT 56 YEARS, S/O. KARIAYAIAH,

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SRI THIMMAIAH AGED ABOUT 62 YEARS, S/O. HATTIGOWDA,

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SRI SHIVARUDRAPPA AGED ABOUT 48 YEARS, S/O. MADAPPA,

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SRI PRASADA M.P.N. AGED ABOUT 43 YEARS, S/O. K. PURUSHOTHAM,

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SRI BANDI GOWDA AGED ABOUT 53 YEARS, S/O. JAVAREGOWDA,

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SRI NINGANNA .C AGED ABOUT 48 YEARS, S/O. LATE CHIKKANNA

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SRI SHIVARAMU D.K. AGED ABOUT 40 YEARS, S/O. KRISHNA

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SRI MANCHE GOWDA H.S. AGED ABOUT 41 YEARS, S/O. SIDDAPPA

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SRI SUBASH Y.S. AGED ABOUT 47 YEARS, S/O. LATE SHANKARALINGEGOWDA,

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SRI CHANDRASHEKAR S.M. AGED ABOUT 43 YEARS, S/O. LATE MALLEGOWDA,

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SRI KRISHNE GOWDA M.S. AGED ABOUT 50 YEARS, S/O. SANNEGOWDA,

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SRI BASAVARAJA H.E. AGED ABOUT 43 YEARS, S/O. ERAIAH

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SRI RAJANNA AGED ABOUT 45 YEARS, S/O. CHIKKAJAVARAIAH

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SRI NINGARAJA .K AGED ABOUT 41 YEARS, S/O. KALASHETTY,

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SRI JAYAKUMARA Y.S. AGED ABOUT 50 YEARS, S/O. SRINIVASAIAH,

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SRI JOKEN SAGAYANATHAN AGED ABOUT 60 YEARS, S/O. ANTONY,

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SRI SHANBOG B.L. AGED ABOUT 55 YEARS, S/O. LAKSHMINARAYANA,

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SRI MAHESHA .C AGED ABOUT 44 YEARS, S/O. CHANNAPPA,

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SRI BORE GOWDA AGED ABOUT 39 YEARS, S/O. JAVAREGOWDA,

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SRI PUTTARAMARADHYA .S AGED ABOUT 53 YEARS, S/O. LATE SIDDARAMARADHYA,

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SRI SHIVASHANKAR .B AGED ABOUT 55 YEARS, S/O. BORAIAH,

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SRI SHIVALINGAIAH .M AGED ABOUT 42 YEARS, S/O. MADAIAH,

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SRI PUTTASWAMY Y.M. AGED ABOUT 50 YEARS, S/O. MOTAIAH,

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SRI RAMAIAH T.P. AGED ABOUT 52 YEARS, S/O. PUTTAIAH,

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SRI BOREGOWDA .S AGED ABOUT 44 YEARS, S/O. SIDDEGOWDA,

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SRI PRASADA S.N. AGED ABOUT 42 YEARS, S/O. K.V. MAHALINGA BHATTA,

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SRI PUTTASWAMY Y.H. AGED ABOUT 47 YEARS, S/O. LATE NATHAPPA ALIAS HANUMAIAH,

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SRI CHIKKASIDEEGOWDA AGED ABOUT 40 YEARS, S/O. CHIKKA ANKEGOWDA,

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SRI SUNDARA H.C. AGED ABOUT 46 YEARS, S/O. CHIKKA BORAIAH,

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SRI SOMASHEKAR .K AGED ABOUT 42 YEARS, S/O. KEMPEGOWDA,

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SRI MANJU, AGED ABOUT 43 YEARS, S/O. KARIYAPPA,

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SRI LINGANNA, AGED ABOUT 53 YEARS, S/O. LATE NINGANNA MOGAIAH,

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SRI NAGARAJA D.T. AGED ABOUT 46 YEARS, S/O. THIMMEGOWDA ALIAS ANNAIAH,

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SRI NAGARAJAMURTHY Y.S. AGED ABOUT 48 YEARS, S/O. NINGAIAH,

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SRI YOGESHA Y.M. AGED ABOUT 40 YEARS, S/O. MOTALINGEGOWDA,

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SRI GIRIDHARA .R AGED ABOUT 46 YEARS, S/O. RAJANNA M.K.

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SRI VISHWANATH SASTRY, AGED ABOUT 50 YEARS, S/O. K.S. CHANDRASHEKARASASTRY,

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SRI MANJUNATHA .D AGED ABOUT 42 YEARS, S/O. DEVEGOWDA,

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SRI SIDDEGOWDA AGED ABOUT 45 YEARS, S/O. SIDDEGOWDA,

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SRI BALAVEDRA SIMON AGED ABOUT 42 YEARS, S/O. WILLION RAJ,

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SRI KRISHNAMURTHY S.G. AGED ABOUT 45 YEARS, S/O. GOPALAIAH,

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SRI BASAVARAJ B.K. AGED ABOUT 48 YEARS, S/O. B. KARIYAPPA,

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SMT. BHARATHI AGED ABOUT 35 DYEARS, W/O. LATE RAVI Y.H.

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SRI NINGE GOWDA AGED ABOUT 62 YEARS, F/O. LATE GOPALA Y.N.

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ALL ARE R/O. C/O. M/S. KARNATAKA MALLADI BIOTICS EMPLOYEES UNION, KALYANA BHAVANA BUILDING, THYAGARAJA ROAD, MYSURU – 570 023.

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M. SHIVARAJU

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S/O. SHRI MALLAIAH, AGED ABOUT 47 YEARS, RESIDING AT DOOR NO.766, DODDARASINAKERE, CHIKKAMARIGOWDA NAGARA, CHIKKARASANIKERE HOBLI, MADDUR TALUK, MANDYA DISTRICT, KARNATAKA – 571 422.

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K.L. CHANNAKESHAVA

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S/O. SHRI LINGEGOWDA, AGED ABOUT 54 YEARS, RESIDING AT KALMANTIDODDI, KERGODI HOBLI, MANDYA TALUK, MANDYA DISTRICT, KARNATAKA – 571 446. (AMENDED AS PER ORDER OF THIS COURT DATED 14/08/2024) ... PETITIONERS

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(BY SRI N.G. PHADKE, ADVOCATE FOR P-14, P-16, P-19, P-20, P-30 TO P-41, P-28, P-31, P-32, P-34, P-43 TO P-50, P-51, P-53 TO P-58, P-60 TO P-69, P-42, P-51, P-59, P-70, P-52, P-70, P-71 TO P-79, P-80; SMT. AVANI CHOKSHI, ADVOCATE FOR P-7, P-12, P-13, P-15, P-18, P-21, P-22, P-27, P-29, P-30, P-33 & P-35; SRI MAITREYI KRISHNAN, ADVOCATE FOR P-81 & P-82)

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AND:

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M/S. KARNATAKA MALLADI BIOTICS LTD., NOW KNOW AS EMBIO LTD., POLT NO.71-74, TUBINKERE INDUSTRIAL AREA, MANDYA-571402 REP. BY ITS MANAGING DIRECTOR. ... RESPONDENT

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(BY * SRI J. PRADEEP KUMAR , ADVOCATE)

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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 INDUSTRIAL TRIBUNAL AT MYSORE; QUASH THE AWARD DATED 21.07.2015 PASSED BY THE INDUSTRIAL TRIBUNAL AT MYSORE IN REF. NO.156/2010 AT ANNEXURE-A IN SO FAR AS THE PETITIONERS AND THE TWO DECEASED WORKMEN ARE CONCERNED; HOLD THAT LAYING OF THE 84 WORKMEN w.e.f. 22.06.2009 BY THE RESPONDENT (AS REFERENCED FOR ADJUDICATION AND REFERRED TO IN ANNEXURE-A, AWARD) IS ILLEGAL AND ETC.

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IN W.P. NO.17692/2018

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BETWEEN:

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THE WORKMEN, KARNATAKA MALLADI BIOTICS

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*Corrected vide Chamber Order dated 10.10.2024

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EMPLOYEE’S UNION, NOW CALLED AS EMBIO LTD., PLOT NO.71-74, TUBINAKERE INDL. AREA, MANDYA – 571 402 REPRESENTED BY THE GENERAL SECRETARY KARNATAKA MALLADI BIOTICS EMPLOYEES UNION, AGATAHALLI, D.B. HALLI POST, PANDAVAPURA TALUK, MANDYA DISTRICT. ... PETITIONER

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(BY SRI N.G. PHADKE, ADVOCATE) AND:

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THE MANAGEMENT, M/S. KARNATAKA MALLADI BIOTICS LTD., NOW CALLED AS EMBIO LTD., PLOT NO.71-74, TUBINAKERE INDL. AREA, MANDYA – 571 402, REPRESENTED BY ITS MANAGING DIRECTOR. ... RESPONDENT

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(BY SRI J. PRADEEP KUMAR, ADVOCATE)

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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 LABOUR COURT, MYSURU; QUASH THE AWARD DATED 15.07.2017 PASSED BY THE LABOUR COURT, MYSURU IN REFERENCE NO.23/2016 AT ANNEXURE-N; HOLD THAT THE ACTION OF THE RESPONDENT IN RETRENCHING THE 8 WORKMEN W.E.F 01.03.2010 IS ILLEGAL AND ETC.

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THESE WRIT PETITIONS COMING ON FOR DICTATING ORDERS, 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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Since common questions are involved, both the petitions are taken up together.

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Petitioners-workmen are seeking for the

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following reliefs in W.P.No.57049/2015:

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“(i) quash the award dated 21.07.2015 passed by the Industrial Tribunal at Mysore in Reference No.156/2010 at Annexure: A, in so far as the Petitioners and the two deceased workmen are concerned;

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and,

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(ii) hold that laying off the 84 workmen w.e.f. 22.06.2009 by the Respondent (as referenced for adjudication and referred to in Annexure: A, Award) is illegal;

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and,

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(iii) hold that the action of the Respondent in retrenching the 84 workmen w.e.f. 06.08.2009 (as referenced for adjudication and referred to in Annexure: A, Award) is illegal;

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and,

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(iv) declare that the Petitioners workmen 1 to 78 are deemed to be in the services of the Respondent

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and the two deceased workmen viz. Ravi Y.H. & Gopal Y.N. till their death were in the services of the Respondent with continuity of services with all the consequential benefits;

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and,

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(V) direct the Respondent to pay full back-wages to the Petitioners 1 to 78 for the period from 22.06.2009;

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and,

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(vi) direct the Respondent to pay full back-wages from 22.06.2009 upto the date of death of the two deceased workmen viz. Ravi Y.H. & Gopal Y.N. to the Petitioners Sl. Nos.79 & 80, respectively with terminal benefits;

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and,

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(vii) grant such reliefs as this Hon’ble Court deems fit in the facts and circumstances of the case including cost in the interest of justice.”

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3. Petitioner-Union is seeking for the following

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reliefs in W.P.17692/2015:

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“(i) quash the award dated 15.07.2017 passed by the Labour Court, Mysuru in Reference No.23 of 2016 at Annexure: N;

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and,

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(ii) hold that the action of the Respondent in retrenching the 8 workmen w.e.f. 01.03.2010 is illegal;

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and,

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(iii) declare that the 8 workmen retrenched w.e.f. 01.03.2010 are deemed to be in the services of the Respondent with continuity of services with all the consequential benefits;

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and,

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(iv) direct the Respondent to pay full back-wages to the 8 workmen w.e.f. 01.03.2010;

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and,

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(v) grant such reliefs as this Hon’ble Court deems fit in the facts and circumstances of the case including cost in the interest of justice.”

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Petitioners are assailing the legality and

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correctness of the order passed by the Industrial Tribunal, Mysore (hereinafter referred to as the ‘Tribunal’ for short), whereby, the reference was rejected holding that the respondent – management was justified in retrenching the workers after laying off the factory by paying

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retrenchment compensation. In the claim statement, the petitioners urged and pleaded that the respondentmanagement had employed more than 100 workmen at the relevant point of time and period and as such, laying off/terminating these 92 workmen without obtaining permission from the appropriate Government is illegal. The points of reference raised by the Government are as under:

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“(i) Whether the establishment having more than 100 workmen, the action of the respondent in laying off workers on 22.02.2009 and thereafter, retrenching 84 workers with effect from 06.09.2009 justified, and retrenchment of 8 workmen with effect from 01.03.2010 by order dated 26.11.2010 was justified if not, what compensation workers were entitled to?

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(ii) Whether the act of respondent in initially declaring lay off, then retrenching the 92 workmen and later 84 and 8 workmen, on the ground of lack of raw material and inability to sell produced items was justified, and if not, then what compensation the workmen are entitled to?”

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The counter was filed by the respondent –

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management, inter alia, contending that the company had

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problems of tying-up funds for financing the project to set up at Mandya and due to the delay on the part of the financial institution in sanctioning the funds, commissioning of plant was delayed and the company could not carry on business for nearly two years from 1995 to 1997. In view of non-getting of adequate financial support from June 1997 to August 1998, the operation was restarted in August 1998 with the support from the associate company M/s.Emmellen Biotech Pharmaceutical Ltd., and the operations were carried out on a very low capacity utilization and M/s. Karnataka Malladi Biotics Ltd., (“KMBL”) incurred heavy loss during 1997-98 and 1998-99, the company was declared as a sick industry by BIFR and IDBI was appointed as operating agency and in the year 2003, BIFR sanctioned the scheme of rehabilitation to the company with consent of all the lenders, and the company was de-registered from the purview of BIFR as a sick industry. It suffered huge loss and as per the audited accounts, accumulated losses were increased. The problems faced by the respondent-

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company were further compounded from the petitionerworkmen in the form of absenteeism and frequent strikes resulting in the loss of production. The methods adopted by the company, requesting the workers to accept for 20% reduction in the wages, announcing Voluntary Retirement Scheme (“VRS”) and the respondent – company facing problems of non-availability of raw material for the production and accumulation of stocks, it had no option, but to lay-off the workmen as supervisory staff from 22.06.2009 and subsequently, retrenched 84 out of 92 workmen vide Form - P dated 06.08.2009 and at the time of laying-off, the management was engaged 92 workers, register of attendance for the previous 12 months clearly indicates that the company had engaged only 92 workers and it never engaged 121 workmen as alleged by the petitioners.

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The Tribunal, by considering the material on

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record, arrived at a conclusion that the petitioners have failed to establish that the management has employed

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more than 100 workers as on the date of declaring lay off

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and retrenching 84 and 8 workers and rejected their reference.

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Learned counsel for the petitioners Sri

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N.G.Phadke and Smt. Avani Chokshi would contend and urge the following grounds:

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i. Taking this Court to the definition of ‘workman’ as defined under Section 2(s) of the Industrial Disputes

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Act, 1947 (“the Act” for short) submits that even casual workers would amount to workmen, if they had worked for over 240 days.

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ii. That even the workers employed through contract would be workmen through their employer and would be respective contractor.

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iii. That the workmen examined 32 witnesses in support of their claim and the workmen consistently took a stand and deposed that total number of workmen

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employed in the establishment in the year before the

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retrenchment exceeded 100 as stated below:

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Permanent workmen on rolls	92
Workmen who had transferred on 17.09.2009/01.10.2009	17
Casual workers for packing / manufacturing	28
employed directly on contract basis, but not through contractor
Directly employed security guards	17
Security guards employed through contractor	Over 35

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iv. Taking to the evidence of WW.1, it is stated that 17 security guards employed by the respondent worked continuously for a period from 01.06.2008 to 31.03.2009 and taking to the cross-examination of MW.1 it is submitted that the management witness has admitted that he has appointed the security people to look after the Mandya plant. That from 22.06.2009 and 06.08.2009, there were 137 workmen directly employed by the respondent – company and the evidence of WW.1 has not been challenged by the respondent-management.

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v. That the Tribunal has not applied its judicial

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mind to the provisions of the ID Act in particular Sections 2(s), 25K, 25M and 25N which has resulted in unjust passing of the impugned order.

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vi. That the Tribunal ought to have taken into account directly appointed 17 security guards and 28 workmen appointed to discharge the duties of manufacturing and packing as sweeper and office boy on contract basis and the total number of workmen employed by the respondent- management on an average per day for the preceding twelve months would have been 137.

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vii. That an adverse inference has to be drawn in lieu of allowing of I.A.No.1. Elaborating the submission, it is stated that the petitioners had filed I.A.No.1 dated 12.12.2001 before the Tribunal calling for the documents from the respondent-management as to the 28 named employees who were appointed on contract basis month wise salary and wages paid to them for the period from 01.04.2007 to 31.03.2010 and the details of month wise

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salary paid in respect of 17 employees for the period from 01.06.2008 to 31.03.2008 and the other records, was allowed by the Tribunal and since the respondent did not file objections to IA.No.1 and the respondentmanagement having not complied with the direction of the Tribunal and withholding the relevant documents called for, as the first evidence being the management and the management having withheld the same, there would be reversal of burden of proof and adverse inference would be required to be taken against the respondentmanagement.

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viii. The respondent - management has only produced the attendance of 92 permanent workers at Ex.M-5 to M-31 only. Attendance register of remaining employees and pertaining to the permanent employees for the said period and the other records pertaining to the employees were not produced by the respondent, despite specific direction and presumption arises against the respondent-management for non-production of the

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attendance register and the muster rolls for the said period and the workmen having discharged their initial burden by production of the documents in their possession.

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ix. The respondent without taking prior permission of the Government for laying off the workmen on 22.06.2009 and retrenching 84 workmen on 06.08.2009 is in violation of Section 25F and 25N of the ID Act and such laying-off and retrenchment becomes void . The consequence of failure to take prior permission as mandate by Section 25F, 25M and 25N, the petitioner – workmen would be entitled for reinstatement with full backwages, continuity of service and all consequential benefits as they had never retrenched/laid-off. In support of their contentions reliance is placed on the following decisions:

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(i) Devinder Singh vs. Municipal Council, Sanaur¹ (Devinder Singh)

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1 2011 (2) SCC (L&S) 153

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(ii) Chairman-cum-Managing Director, Orissa Road Transport Co. Ltd., vs. Ramesh Chandra Gouda and another² (Ramesh Chandra Gouda)

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(iii) Bihar State Electricity Board and another vs. Ram Deo Prasad Singh and others³ (Ram Deo Prasad Singh)

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(iv) Hussainbhai, Calicut vs. The Alath Factory Thezhilali Union, Kozhikode and others⁴ (Hussainbhai)

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(v) Gopal Krishnaji Ketkar vs. Mohamed Haji Latif and others⁵ (Gopal Krishnaji)

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(vi) Bharat Heavy Electrical Ltd., vs. State of U.P. and others⁶ (Bharat Heavy Electrical)

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(vii) Gauri Shankar vs. State of Rajasthan⁷ (Gauri Shankar)

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(viii) Gujarat Steel Tubes Ltd. and others vs. Gujarat Steel Tubes Mazdoor Sabha and others⁸ (Gujarat Steel Tubes Ltd)

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2 1994 (2) LLJ 1127

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3 (2012) 1 SCC (L&S) 435

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4 ( 1978) 4 SCC 257

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5 AIR 1968 SCC 1413

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6 (2003) 6 SCC 528

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7 (2015) 12 SCC 754

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8 1980 SCC (L&S) 197

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(ix) Heinz India Private Limited and another vs. State of Uttar Pradesh and others⁹ (Heinz India Private)

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(x) Nar Singh Pal vs. Union of India and others¹⁰ (Nar Singh Pal)

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(xi) Maharashtra General Kamgar Union vs. Indian Gum Industries Ltd.¹¹ (Maharashtra General Kamgar Union)

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(xii) L.Robert D’Souza vs. Executive Engineer, Southern Railway and another¹² (L.Robert D’Souza)

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(xiii) Ved Prakash Gupta vs. Delton Cable India (P) Ltd.¹³ (Ved Prakash Gupta)

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(xiv) Shriram Industrial Enterprises Ltd. vs. Mahak Singh and others¹⁴ (Mahak Singh)

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(xv) Food Corporation of India and others vs. General Secretary, FCI Indian employees Union and others¹⁵ (Food Corporation of India)

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Per contra, learned counsel appearing for the

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respondent-management justifies the award passed by the

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9 (2012) 5 SCC 443

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10 (2000) 3 SCC 588

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11 (2008) 1 SCC (L&S) 574

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12 (1892) 1 SCC 645

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13 (1984) 2 SCC 569

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14 AIR 2007 SC 1370

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15 AIR 2018 SC 3902

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Tribunal and contends that the management was facing problem of non-availability of raw materials for manufacture at Mandya Plant, and accumulation of stocks of products manufactured on conversion basis by the factory at Mandya. There was severe shortage of raw materials due to constrains in the form of exorbitant increase in raw material prices and the situation worsened, the management had no option but to give lay off to all the workmen and supervisory staff from 22.01.2009 to 06.07.2009, as an temporary measure which came to be extended and subsequently, the management could not

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come out of the problems and they retrenched 84 workmen out of 92 workmen. At the time of declaring lay off, the management had engaged 92 workers and never engaged 121 workmen and as such, no permission is necessary to be sought in the instant case, as the management never employed any worker more than 100. In support of his contention, learned counsel placed the decision of the Apex Court in the case of The Workmen

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of the Food Corporation of India vs. M/s. Food

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Corporation of India¹⁶ .

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Having heard learned counsel for the parties,

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the point that arises for consideration is:

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“Whether the retrenchment of the workers was justified and whether the respondent-management had employed for more than 100 workers requiring permission to be taken by the management from the authority?”

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The burden was on the workman to establish

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that there were more than 100 workers working in the establishment as on the date of declaring lay-off and retrenching the workmen. Section 25K ‘application of Chapter VB’ arises, when the provisions of this chapter apply to the industrial establishment (not being an establishment of seasonal character on which work is performed only intermittently) in which not less than 100 workmen were employed on an average per working day for the preceding 12 months. If the question arises

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16 1985-II-LLJ-4

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whether there is an industrial establishment is of a seasonal character or whether the work is performed therein only intermittently, the decision of the appropriate Government thereon is final.

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The provisions of this chapter has been made applicable to the establishments in which 100 or more workmen are required on an average per working day for the preceding 12 months. Section 25L of Chapter VB gives ‘definitions’ for the purpose of this chapter. Section 25M herein refers to ‘prohibition of lay-off’. Section 25N prescribes ‘conditions precedent to retrenchment of workmen’. Section 2(kkk) defines ‘lay-off’ means “the failure, refusal or inability of an employer on account of shortage of coal, power or raw materials or the accumulation of stocks or the breakdown of machinery [or natural calamity or for any other connected reason] to give employment to a workman whose name is borne on the muster rolls of his industrial establishment and who has not been retrenched.

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Now this section prohibits an employer to lay off “any workman” other than the ‘badli workman’ or a

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‘casual workman’ whose name is borne on the muster rolls of their industrial establishment, “employing 100 workmen or more workmen” (which is not a seasonal character or in which work is performed only intermittently) without the

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“prior permission” of the appropriate government as specified by the authority except in cases where lay off is due to shortage of power or natural calamities.

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Section 25N provides conditions precedent to retrenchment of workmen, which reads as under:

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“ 25N. Conditions precedent to retrenchment of workmen.— (1) No workman employed in any industrial establishment to which this Chapter applies, who has been in continuous service for not less than one year under an employer shall be retrenched by that employer until.—

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(a) the workman has been given three months’ notice in writing indicating the reasons for retrenchment and the period of notice has expired, or the workman has been paid in lieu

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of such notice, wages for the period of the notice; and

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(b) the prior permission of the appropriate Government or such authority as may be specified by that Government by notification in the Official Gazette (hereafter in this section referred to as the specified authority) has been obtained on an application made in this behalf.

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(2) An application for permission under subsection (1) shall be made by the employer in the prescribed manner stating clearly the reasons for the intended retrenchment and a copy of such application shall also be served simultaneously on the workmen concerned in the prescribed manner.

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(3) Where an application for permission under sub-section (1) has been made, the appropriate Government or the specified authority, after making such enquiry as it thinks fit and after giving a reasonable opportunity of being heard to the employer, the workmen concerned and the person interested in such retrenchment, may, having regard to the genuineness and adequacy of the reasons stated by the employer, the interests of the workmen and all other relevant factors, by order and for reasons to be recorded in writing, grant or

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refuse to grant such permission and a copy of such order shall be communicated to the employer and the workmen.

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(4) Where an application for permission has been made under sub-section (1) and the appropriate Government or the specified authority does not communicate the order granting or refusing to grant permission to the employer within a period of sixty days from the date on which such application is made, the permission applied for shall be deemed to have been granted on the expiration of the said period of sixty days.

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(5) An order of the appropriate Government or the specified authority granting or refusing to grant permission shall, subject to the provisions of sub-section (6), be final and binding on all the parties concerned and shall remain in force for one year from the date of such order.

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(6) The appropriate Government or the specified authority may, either on its own motion or on the application made by the employer or any workman, review its order granting or refusing to grant permission under sub-section (3) or refer the matter or, as the case may be, cause it to be referred, to a Tribunal for adjudication:

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Provided that where a reference has been made to a Tribunal under this sub-section, it shall pass an award within a period of thirty days from the date of such reference.

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(7) Where no application for permission under sub-section (1) is made, or where the permission for any retrenchment has been refused, such retrenchment shall be deemed to be illegal from the date on which the notice of retrenchment was given to the workman and the workman shall be entitled to all the benefits under any law for the time being in force as if no notice had been given to him.

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(8) Notwithstanding anything contained in the foregoing provisions of this section, the appropriate Government may, if it is satisfied that owing to such exceptional circumstances as accident in the establishment or death of the employer or the like, it is necessary so to do, by order, direct that the provisions of sub-section (1) shall not apply in relation to such establishment for such period as may be specified in the order.

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(9) Where permission for retrenchment has been granted under sub-section (3) or where permission for retrenchment is deemed to be granted under sub-section (4), every workman who

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is employed in that establishment immediately before the date of application for permission under this section shall be entitled to receive, at the time of retrenchment, compensation which shall be equivalent to fifteen days’ average pay for every completed year or continuous service or any part thereof in excess of six months.”

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This section is intended to maintain a higher

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tempo of production and productivity for preserving industrial peace and harmony. The requirement for prior permission to retrench the workman is foremost a precondition for a valid retrenchment, however, the establishment having more than 100 workmen. The evidence of WW.1 to WW.29, who are permanent workers, WW.30-casual worker and WW.31-Assistant Director have spoken about the management in illegally laying off most of the workmen and retrenching the workmen whose dispute is referred, the workmen stated that they were working in the establishment, other than merely stating that they were working in the establishment, no material is forth coming.

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It is the specific case of the petitioners that in case of the security guards who were 17 in numbers and 28 contract labourers who worked in the establishment during the said period is to be treated as a workman under Section 2(s) of the ID Act, and the total number of workmen for the purpose of 25K of the ID Act would come to 100 workmen. Section 2(s) of the ID Act reads as under:

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“ 2. Definitions.— In this Act, unless there is anything repugnant in the subject or context,—

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(s) “workman” means any person (including an apprentice) employed in any industry to do any manual, unskilled, skilled, technical, operational, clerical or supervisory work for hire or reward, whether the terms of employment be express or implied, and for the purposes of any proceeding under this Act in relation to an industrial dispute, includes any such person who has been dismissed, discharged or retrenched in connection with, or as a consequence of, that dispute, or whose dismissal, discharge or retrenchment has led to that dispute, but does not include any such person—

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(i) who is subject to the Air Force Act, 1950 (45 of 1950), or the Army Act, 1950 (46 of 1950), or the Navy Act, 1957 (62 of 1957); or

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(ii) who is employed in the police service or as an officer or other employee of a prison; or

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(iii) who is employed mainly in a managerial or administrative capacity; or

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(iv) who, being employed in a supervisory capacity, draws wages exceeding ten thousand rupees per mensem or exercises, either by the nature of the duties attached to the office or by reason of the powers vested in him, functions mainly of a managerial nature.”

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In the instant case, there are no materials forthcoming to show that the contract workers and the security guards as alleged by the petitioners were employed by the respondent-management to be termed as

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‘workman’ under Section 2(s) of the ID Act. For the purpose of computation of total number of workmen employed on an average per working day for the last 12 months, as contemplated under Section 25K, only those who answer to the definition of workman as contained in

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Section 2(s) of the ID Act were liable to be included. In the absence of any material to show that they were directly employed by the management, they cannot be treated as workman as defined under Section 2(s) of the ID Act so as to compute the total number of workmen under Section 25k of the ID Act. The burden which was

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on the workmen to establish that there were more than 100 workmen having not been discharged, merely filing of an application and directing the respondent-Management to provide the muster rolls cannot establish that the petitioners-workmen have discharged the burden which

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was cast upon them to show that the respondentmanagement employed more than 100 workers, adverse inference cannot be drawn against the respondent - management for non-production of any document like attendance register. On the contrary, the management has produced the attendance registers at Ex.M-5 to M-31, that the number of employees in the management from July 2008 to August 2009 never crossed 100 workmen. As such, there is no material to treat the contract workers

¶286

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and the security guards as the regular workers of the respondent- management. The decisions placed reliance by the petitioners, this Court has absolutely no quarrel about the settled proposition of law, however, the said decisions are distinguishable and not applicable to the present facts.

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For the purpose of computing the number of workmen while considering Section 25K of the ID Act contract workmen could not be considered and the Court proceeded that if the contract workers were included for the purpose of Section 25K, thereby, chapter VB the benefit of Section 25K would also be extended and would claim retrenchment compensation/notice against the principal employer.

¶289

In the instant case, the contract

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labourers/casual workers were not directly employed by the employer/establishment, employment would not come under the purview of Section 25K of the ID Act. The point

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