Allowed

The Management of Chemplast v. the Presiding Officer

Madras HC11 Feb 2021WP/20219/2004

Case brief

AI extract

What is this about?

High Court quashed a Labour Court award granting additional compensation to workmen who resigned under a Voluntary Retirement Scheme. The Court held these workers were not similarly situated to those who contested closure and lacked pre-existing rights under a settlement limited to the latter group. The award was also set aside for being perverse due to reliance on unproven hearsay evidence regard

What did the court decide?

The Award of the Labour Court dated 05.04.2004 is quashed and the Writ Petition is allowed.

The Management of Chemplast Vs the Presiding… — Pension and Retirement Benefits | Madras HC (2021)

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IN THE HIGH COURT OF JUDICATURE AT MADRAS

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DATED : 11.02.2021

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CORAM

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THE HONOURABLE MR. JUSTICE M.GOVINDARAJ

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W.P.No.20219 of 2004 and W.M.P.Nos.2278 and 24346 of 2004

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The Management of Chemplast Sanmar Ltd., Plant III, Raman Nagar, Mettur Dam 636 403 rep. by its, General Manager - Secretarial and Legal ... Petitioner

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Vs.

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The Presiding Officer, Central Government Labour Court, Chennai.

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M.Sengodan

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S.Kandasamy

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M.Thangavel

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N.Ganesan

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A.Ganesan

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R.Kandan

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S.Arthanari

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C.Kavery

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10.R.Kandan

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11.C.Thangavel

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12.Karuppannan

13.K.Muthan

14.R.Rasi

15.M.Muniyan

16.S.Karuppanna Goundar

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17.P.Karuppasamy

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18.K.Arumugam

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19.M.Nallamuthu 20.S.P.Murugesan 21.S.Palaniappan 22.P.Kandasamy 23.K.Palaniappan 24.R.Velayudham 25.C.Pachiyappan 26.O.Murugan 27.T.Ramasamy 28.S.Giri

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https://hcservices.ecourts.gov.in/hcservices/

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29.V.Kumaraguru 30.P.Sengottayan

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C/o.Mr.S.Ayyathurai Advocate

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... Respondents

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PRAYER: The Writ Petition has been filed under Article 226 of the Constitution of India praying to issue a Writ of Certiorari to call for the records of the first respondent in C.P.No.44 to 67 and 73 to 77 of 1999 and quash the order dated 05.04.2004.

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For Petitioner : Mr.S.Ravindran, Senior Counsel for Mr.Sai Prasad

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For Respondent Nos.2, 3, 5 to 30 : Mr.S.Ayyathurai

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O R D E R

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The Writ Petition is directed against an Award passed by the Labour Court in Computation Petition for determining the amount of compensation in addition to what has been paid under Voluntary Retirement Scheme on par with the other workmen.

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The short facts leading to this case are that respondent Nos.2 to 30 were working in Limestone Mines under the Petitioner Management. Since the mining operation was considerably reduced and the economical factors were not encouraging the Management offered Voluntary Retirement Scheme and Special Gratuity Scheme on 10.07.1994 fixing the last date as 25.07.1994. On 25.07.1994 and 27.07.1994, two workers have availed the benefits of the Scheme and left the service. Thereafter, on 07.09.1994 and 31.10.1994, 11 others workers have availed the benefits and left the service. On 04.11.1994, the Central Government granted permission to close the Mines. On the same date, the Petitioner Management issued termination orders along with Retrenchment Compensation to the remaining workers.

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The said order of closure was challenged by the Union by way of Writ Petition in W.P.No.18719 of 1994. During the pendency of the Writ Petition, 39 workmen have offered to go under Voluntary Retirement Scheme and submitted their resignation on 11.11.1994 and left the services. Thereafter, the remaining 22 workmen pursued the Writ Petition in which, this Court by its order dated 11.06.1998 declared the order of closure as illegal for want of consultative process with the workmen.

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Challenging the order of this Court in W.P.Nos.18719 of 1994 dated 11.06.1998, the Petitioner Management filed Writ Appeal in W.A.Nos.788 and 789 of 1998. During the pendency of the Writ Appeal, the parties have entered into a Memorandum of Settlement on 09.11.1998 and the Writ Appeal was disposed of in terms of the Memorandum of Settlement. According to the Memorandum of Settlement, all the 22 workers were given a total compensation of around Rs.3,00,000/-. After the disbursement of the compensation, 52 workers who have voluntarily retired from service by opting Voluntary Retirement Scheme made a representation on 16.11.1998 to extend the benefits of higher compensation to them also. They have filed a claim petition in C.C.P.No.44 of 1999 for the said purpose. The Labour Court, after considering the materials placed before it, decided in favour of the workmen.

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The Writ Petitioner has challenged the Award dated 05.04.2004 on three grounds:-

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(i) The respondents 2 to 30 do not have pre-existing right to file the claim petition as they do not fall under definition of Workman under Section 2(s) of the Industrial Disputes Act,

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(ii) For maintaining the claim petition, the workers shall establish that their entitlement. Since there is no preexisting right, the claim petition is not maintainable, and

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(iii) the Award passed by the Labour court is perverse for want of evidence.

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According to the learned Senior Counsel for the petitioner, the respondents 2 to 30 have resigned their job by tendering their resignation and availed the benefits as per the Voluntary Retirement Scheme announced by the Petitioner Management. After having received the benefits, they shall be treated as workmen resigned from service. Section 2(s) of the Industrial Disputes Act contemplates that a person who is dismissed, discharged or retrenched alone can be considered as a Workman to have right to raise industrial dispute. The persons who have resigned from service will not fall under the definition of workman and therefore, they have no right to raise an industrial dispute and thereby, they have no locus standi to raise a claim petition.

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Secondly, he would contend that for filing the claim petition, there shall be a pre-existing right. Insofar as the respondents 2 to 30 are concerned, they have severed relationship of Master and Servant and cannot be said to have any pre-existing right. When there is no pre-existing right, the petition under 33C(2) of the Industrial Disputes Act is not maintainable. Thirdly, the Award passed by the Labour Court is

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perverse for want of evidence. The workmen have let in evidence that they were given a promise that they will be paid a higher compensation in the event of 22 workers, who have gone to Court succeed in the Writ Petition. According to them, it was proved by way of evidence of P.W.1 and P.W.2. On the other hand, the evidence of P.W.1 and P.W.2 does not prove the promise as alleged by them. Without setting out any reasonings, the Labour Court has held that the promise was proved and the petitioners are entitled to the claim. Therefore, the finding is based on no evidence and is perverse and therefore, the Award is liable to be set aside.

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Per contra, the learned counsel appearing for the respondents 2 to 30 would vehemently contend that in the claim petition, they have elaborately narrated the circumstances under which they were forced to tender their resignation. According to the learned counsel, the closure was announced on 04.11.1994 and on the very same day, the retrenchment order was also passed. In fact, the materials available before this Court would go to show that the Management was very much aware of the closure order in advance and they have hastily acted upon without providing ample opportunity to the workers to deliberate over the same. In such a condition, some of the workers have tendered their resignation and accepted the Voluntary Retirement Scheme after their due date. In the eyes of law, the Scheme announced by the Management was not subsisting and it was not validly extended by issuing further notification. Therefore, it cannot be construed that the Voluntary Retirement Scheme was operated upon.

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Later, the 52 workers have challenged the closure order before the High Court. The High Court by its judgment dated 11.06.1998 set aside the closure order. The legal consequence of the order of the High Court is that the workers deemed to have been reinstated in service. However, the top officials of Management misled the respondents 2 to 30 and obtained resignation letters and paid the compensation under Voluntary Retirement Scheme. Since the closure order has been set aside, the resignation made by the respondents has become non-est and the Management cannot dwell upon such a happening. It should be considered as the payment made to the respondents as a goodwill gesture and that will not fall within the definition of retirement compensation under Voluntary Retirement Scheme. Therefore, they are also similarly placed with other workmen to continue to pursue their right before the High Court.

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During the pendency of the Writ Appeal, the similarly placed workmen have entered into a Settlement by which, they were given compensation of Rs.1,15,000/- over and above the compensation awarded to them. Since respondents 2 to 30 are also similarly placed, they are entitled to the very same

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benefits. The promise made by the top officials at the meeting held at Yercaud, was proved unambiguously before the Labour Court in the claim petition filed by them. Therefore, considering the proof through reliable evidence that the Labour Court has extended the compensation to the similarly placed workmen like the respondents also, the Award passed is on sound reasons and in accordance with the judgments of the Hon'ble Supreme Court. In support of his contention, the learned counsel would rely on the following judgments:-

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(a) A.Satyanarayana Reddy Vs. Presiding Officer Labour Court [ (2016) 9 SCC 462 ]

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(b) Damodar Valley Corporation Vs. Workmen

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[ (1974) 3 SCC 57 ]

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[ (2006) 2 SCC 747 ]

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(d) The K.C.P.Employees' Association Vs. The Management of K.C.P. Ltd., [ (1978) 2 CC 42 ]

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(e) Indian Overseas Bank Vs. I.O.B. Staff Canteen Workers' Union [ (2000) 4 SCC 245 ]

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I have heard the learned counsel appearing on either side and perused the materials placed before this Court.

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At the outset, it has to be decided as to whether the respondents 2 to 30 are similarly placed to that of the workers, who got benefits in W.A.No.788 and 789 of 1998.

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There are three clauses of workmen in the present dispute. Viz., (1) who accepted the Voluntary Retirement Scheme before the closure and left the service. (2) the persons like the respondents 2 to 30 who offered to accept the Voluntary Retirement Scheme after the date of closure, and (3) who did not accept the closure as well as the Voluntary Retirement Scheme and fought before the Court for their rights.

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The first group has no grievance as they have accepted the invitation offered under Voluntary Retirement Scheme and availed benefits and likewise, the third group, 22 workmen, who persued their dispute and settled the matter by way of Memorandum of Settlement dated 09.11.1994 recorded in W.A.No.788 and 789 of 1998 also do not have any grievance over the compensation awarded It is only the second group of workmen, who have offered their voluntary retirement / resignation after the closure, on the basis of the promise said to have been given by the top officials of the Petitioner Management, have filed the claim petition. The said respondents 2 to 30 have received the compensation under the Voluntary Retirement Scheme and enjoyed the benefits from the year 1994 onwards.

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It is pertinent to note that this Court, while entertaining the Writ Petition, refused to grant any interim order of stay, wherein, it was observed as follows:-

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"On the other hand taking a pragmatic approach to the issue I am of the opinion that is only 22 workmen who should be satisfied. Pending final adjudications of the matter if the interest of the 22 workmen are taken care of the petitioner union cannot have any grievance. In this view of the matter I dismiss the application for injunction and the application for stay subject to the condition that the second respondent company shall paythe 22 workmen who have not accepted the voluntary retirement scheme 75percent of the last drawn wages till the disposal of the writ petition, this equally open to the 22 workmen if they so desire, to negotiate and accept the voluntary retirement. The writ petition shall be posted for final disposal on 30.01.1995.

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Therefore, as early as in 1994, 22 workmen were treated as a different class. The present respondents fall under the category of workmen, who have accepted the compensation given by the Petitioner Management. In view of the matter, I am of the considered opinion that the respondents 2 to 30 are not similarly placed as that of 22 workmen who continued their fight before the High Court against the Management.

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Going to the next issue raised by the petitioner that the respondents 2 to 30 will not fall under the definition of workman concerned, it is beneficial to read Section 2 (s) of the I.D.Act, as follows:-

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“Workman is defined under Section 2(s) of The Industrial Disputes Act, 1947, as 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, terms of employment be express or implied and includes any such person who has been dismissed, discharged or retrenched in connection with, or as a consequence of dispute. It excludes persons employed in army/Navy/Air Force/Police and those employed in mainly managerial or administrative, supervisory capacity and drawing wages of more than INR 6500.

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Unequivocally, the provision specifies that those who are discharged, dismissed or retrenched as workman, can raise the dispute. In that view of the matter, the respondents 2 to 30 who have resigned from service will not fall under the

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definition of workman and thereby, they do not have any locus standi to raise any industrial dispute. The same view has been affirmed by this court in the case of K.Jayapal Vs. Union of India [ MANU/TN/8392/200].

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Insofar as the issue of pre-existing right and maintainability of the claim petition under 33-C(2) is concerned, it has to be seen whether the respondents 2 to 30 have any pre-existing right. This Court has already observed that the respondents 2 to 30 have offered their resignation to the Management and availed the benefits as early as 1994, whereas, 22 workmen pursued the dispute till 1998. When the Writ Appeal was pending before the Division Bench, they have entered into a Memorandum of Settlement. It is relevant to note Clause 7 of the terms of the Settlement which reads as under:-

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"7. It is specifically agreed between Chemplast and the unions/ 22 persons that this shall not be set as a precedent for any person whatsoever, in respect of erstwhile employed of Sowdapuram Mines, has opted for VRs during 1994 or any other ex-employed whatsoever."

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It is well settled that the settlement would be binding upon the parties to the same. As per the Clause, it is specifically agreed between the Union as well as the Management that it will cover only 22 workmen, who pursued the dispute before the High Court and it will not serve as a precedent to the erstwhile employees of the Petitioner Management who opted for Voluntary Retirement Scheme in the year 1994. Therefore, when there is a binding agreement between the Union and the Management, it is binding upon its members. Unfortunately, the Settlement also read that only 22 workers are the members of the Union, who challenged the closure order which left out 52 workers who are similarly placed like that of respondents 2 to 30. In that event, the benefit cannot be extended to the respondents 2 to 30. When it is found that this right is not a conferred right to get compensation as per the Settlement which is not extended to the respondents 2 to 30, it should be construed that they do not have pre-existing right to file a claim petition. As such, it is well settled that any claim petition filed under Section 33-C(2) of the Act without any preexisting right is not maintainable.

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The third aspect of the matter is as to whether the Award passed by the Labour Court is based on reasons or not? The Labour Court has relied on the evidence of P.W.1 and P.W.2. It proceeded on the basis that when it is accepted that there was a meeting at Yercaud, it should have been presumed that the promise was also made. On the other hand, the averment made in

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the claim petition and the evidence do not go together. The relevant portion of the averment reads as under:-

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"Then they were told by the Vice-President Mr.Ramani that the workmen could not get stay and the case would take another 5 - 6 years to come for final hearing and therefore, it was better for the workmen to settle by accepting the V.R.S. (Voluntary Retirement Scheme) amount plus P.F. and Gratuity and the Closure of the mines was for ever, and that if by chance mines was operated they would be given employment as new entrant and that if the case ends in favour of the workmen for payment of compensation over and above the V.R.S.amount, the additional amount over and above the V.R.S.amount would also be paid to those who accept the V.R.S.amount now. When the workmen asked Mr.Ramani whether he would give it in writing, he said that he could not commit in writing but the management keep his words as he was speaking on behalf of the management and he would be in service for another 10 years."

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The evidence of P.W.1 reads as under :-

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ehd; vjph;kDjhuh; epWtdj;jpy; 12 Mz;Lfshf bkf;fhdpf;fy; bcwy;guhf ntiughh;j;njd;/ 1/10/92y; eph;thfk; fu';fj;ij K:Ltjhf mwptpg;g [ bra;jhh;fs;/ mij vjph;j;J mz;zh bjhHpyhsh; r';fk; brd;id cah;ePjpkd;wj;jpy; ePjpg;nguhiz kD jhf;fy; bra;jJ/ 3/9/94y; eph;thfk; murh';fj;jplk; mDkjp nfhhp kD bra;jJ/ murh';fKk; mDkjpj;J/ 4/11/94y; nkw;go murh';fj;jpd; k/rh/M/1/ mt;t[j;juit vjph;j;J mz;zh bjhHpyhsh; r';fKk;. rp/I/o/a{/ bjhHpw;r';fKk; brd;id cah;ePjpkd;wj;jpy; tHf;F nghl;lhh;fs;/ ehd; rp/I/o/a{/ r';fj;jpy; cWg;gpdh;/ cah;ePjpkd;wj;jpy; v';fs; tHf;fpy; jil cj;jut[ vJt[k; tH';fg;gltpy;iy vd;Wk;. vdnt. jd;dpr;irahf gjtp tpyfy; jpl;lj;jpd; fPH; gjtp tpyfpdhy; kl;Lnk chpa bjhiffs; tH';fg;gLk; vd;W bjhptpj;jhh;fs;/ ehDk; kw;w kDjhuh;fs; jd;dpr;irahf gjtp tpyf kWj;Jtpl;nlhk;/ vdnt. eph;thfk; uhkd;. Kdpad;. V/fnzrd;. br';nfhld;. fe;jrhkp kw;Wk; vk;/Kdpad; Mfpa cWg;gpdh;fis miHj;J ngr;R thh;j;ij Vw;fhl;oy; ele;jJ/ mg;nghJ eph;thfj;jpdh; r';f cWg;gpdh;fsplk; tHf;F ePjpkd;wj;jpy; KothdhYk; Tl ntiytha;g;g[ ,Uf;fhJ vd;Wk;. eco;l<l;il je;J tpLtjhf cgjiyth; ukzp vd;gth; tha;bkhHpahf bjhptpj;jhh;/ mij eh';fs; vGj;JK:ykhf nfl;L nkyhshpd; kidtp c#h vd;gth; cgj;jiyth; TWtij ek;g[k;goa[k; mth; brhy;go ele;Jf;bfhs;th; vd;Wk;. v';fsplk; bjhptpj;jhh;/ mth;fsJ thh;j;ifis ek;gp eh';fs; jd;dpr;irahf gjtp tpyFtjhf vGjpf; bfhLj;njhk;/ tHf;F epYitapy; eph;thfKk;. bjhHpw;r';fK; ,ize;J 18(1) xg;ge;jj;ij mjpfg;goahd e#;l<L jUtjhf bra;Jf; bfhz;lhh;fs;/ mjd; efy; k/rh/M/2/ mt;bthg;ge;jj;jpd; mog;gilapy; cah;ePjpkd;wj;jpy; ,Ue;j tHf;F Kof;fg;gl;Ltpl;lJ/ mjd; gpwF ehDk;. Vida bjhHpyhsh;fSk; nrh;e;J cah;ePjpkd;w tHf;fpd;

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bjhHpyhsh;fSf;F tH';fpdgoahd e#;l<l;ilna j';fSf;F tH';Fk;go nfl;L fojk; mDg;gpndhk ; / mjpy; eph;thfk; mspj;j thf;FWjpiaa[k; Fwpg;gpl;oUe;njhk;/ 23/11/98y; eph;thfk; v';fs; nfhhpf;iffis epuhfhpj;J gjpy; mDg;gpaJ/ mJ k/rh/M/3/ eph;thfk; gpd;dpl;L Ru';fj;ij vLj;J elj;jp te;jJ/ vdnt. v';fSf;F kPz;Lk; ntiy jUkhW 26/8/2000y; fojk; mDg;gpndhk;/ mjd; efy; k/rh/M/4/ 29/8/2000y; nkw;go nfhhpf;ifia kWj;J eph;thfk; mDg;gpa gjpy; k/rh/M/5 eph;thfk; ehd; rhl;rpaj;jpy; brhy;ypago thf;FWjp vJt[k; bfhLf;ftpy;iy vd;W brhy;tJ jtwhFk;/ vdnt. kDg;go cj;jputpl nfhUfpnwd;/

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The evidence of P.W.1 says that even if the case is decided by the Court against the Management, the workers will not have any re-employment opportunity and they will get only compensation. The promise made would show that the compensation if ordered by the Court would be awarded to them also. On the basis of that promise, they have offered to resign their service.

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On the other hand, during cross-examination, P.W.1 would say that he was not present at the meeting. So the evidence of P.W.1 is nothing but hear say or he can be an interested witness without any personal knowledge. Therefore, the finding of the Labour Court on the basis of the P.W.1 especially when he was not present at the meeting and further finding that there were meetings on 10.11.1994 and 18.11.1994 are based on no evidence and thereby perverse and improper. Sofaras the evidence of P.W.2 is concerned, he has categorically stated that if the Court ordered compensation, it will be paid to the workers. But during cross-examination P.W.2 would say that the meeting happened in first quarter of 1994 and it could not have happened between 01.11.1994 and 15.11.1994, whereas, the case of the claim petitioners is that the meeting had taken place after 05.11.1994. In that event, there is no evidence to show that there was a meeting on that date and the promise was made that the benefits awarded to the 22 workmen would be extended to the respondents 2 to 30.

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In the absence of any evidence, the finding of the Labour Court that the claim petitioners have proved that they are entitled to the additional compensation is based on no evidence and thereby, perverse. In that process, the Labour Court has not set out any reasons for holding that there was a meeting and the promise was made. In such circumstances, I find that the Award of the Labour Court is not sustainable in law on the ground that the claim petitioners are not workmen and they do not have any pre-existing right to maintain the claim petition.

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The judgment relied on by the learned counsel appearing for the claim petitioners in A.Satyanarayana Reddy's

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Case (cited supra) pertains to the past dues prior to the Voluntary Retirement offered by them. The present case is not the case of claim for past dues which was paid to all the workmen. It is an additional compensation which is claimed in terms of the Memorandum of Settlement to members of the Union and the Management. Therefore, the case relied on by the claim petitioners/ the respondents 2 to 30 is not applicable to this case.

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In the result, the order of the Labour Court in C.P.Nos.44 to 67 and 73 to 77 of 1999 dated 05.04.2004 stands quashed and the Writ Petition is allowed. It is always open to the Management to extend the benefits if they wish to do in favour of the claimants. There shall be no order as to costs. Consequently, connected Miscellaneous Petitions are closed.

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Sd/Assistant Registrar(CS III)

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//True Copy//

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Sub Assistant Registrar

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asi

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The Presiding Officer, Central Government Labour Court, Chennai.

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