1 IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION WRIT PETITION NO. 1832 OF 2009 Siemens Limited …. Petitioner. v/s. All India Siemens Employees Union and Anr. …. Respondents. .... Mr. C. U. Singh, Sr. Advocate a/w Mr. V. P. Sawant for the Petitioner. Mr. Sunil K. Kharwal a/w Mr. Ranvir Shekhawat for the Respondents. .... CORAM : S. J. KATHAWALLA, J. DATE : 15th and 16th October 2009. P.C. Rule. By consent of the parties, rule made returnable forthwith. Mr. Kharwal waive notice for respondent Union. 2. The Respondent Union filed a Complaint being Complaint (ULP) No.375/2009 dated 28-8-2009 against the petitioner in the Industrial Court, Mumbai under section 28 read with items 9 and 10 of Schedule IV of the “Maharashtra Recognition of Trade Unions and Prevention of Unfair Labour Practice Act, 1971” (the ‘MRTU & 2 PULP Act;). The Complaint pertained to the transport system provided to the officers and the staff of the petitioner Company as well as officers and staff of its sister concern, Siemens Information Systems Limited. It is the case of the respondents in the Complaint that the facility of the transport system was being managed by the respondent Union since past several years through the existing bus contractors. The petitioner with malafide intention and ulterior motive decided to discontinue and/or change the same and appoint only two contractors of their choice that too without consulting or taking into confidence the Union and the contractors. According to the respondents the petitioner has effected and/or is effecting illegal change without giving notice of change as per Section 9-A of the Industrial Disputes Act, 1947. Respondents also alleged that actions on the part of the petitioner and as proposed by the letters dated 25-6-2009 and circular dated 11.8.2009 are not only illegal, improper, unjustified, malafide but also amounts to unfair labour practice under items 9 and 10 of Schedule IV of the MRTU and PULP Act, 1971. The respondents by their complaint therefore sought a declaration that the proposed action of taking over the management of the transport system in the petitioner 3 Company from the Complainant Union is illegal, malafide and contrary to the terms of contract, existing system, custom usages which is existing in the company for decades. The respondents also sought a direction to the petitioner company to continue with the system of transport contractors and buses as is existing in the company and not to effect their proposed action, i.e. taking over the management of the transport system from the respondents and not to discontinue the existing contractors. In the said complaint, the respondents filed an interim application and sought orders restraining the petitioner from (i) discontinuing the present bus contractors as proposed by the petitioner with effect from 1.9.2009; (ii) bringing new buses and or contractors; (iii) taking the management of the transport system from the respondent no.1; and (iv) to maintain status quo in respect of the transport system, contractors and buses existing in the petitioner Company. 4 By an order of the Industrial Court dated 31st August 2009, the interim application of the respondents have been allowed and the petitioner is directed to continue the transport system as agreed between both the parties as per Memorandum of Understanding (MOU) Dated 5th May 2008 upto 31st March 2010. The said interim Order dated 31st August 2009 is impugned by the petitioner in the present Writ Petition. 3. According to the petitioner, respondent no.1 has signed several settlements with the petitioner with regard to the wages and service conditions of the workmen in the staff category. By virtue of settlement dated 20th September, 1983 covering staff, it was acknowledged that the petitioner had introduced improved transport system for the employees in staff category at Kalwa and Worli with effect from 16th November, 1982 and 15th February 1983 as detailed in Annexure B thereto. It was agreed that the management shall subsidize the transport system organized and administered by respondent no.1 Union for employees in all establishments of the company with effect from 1st June 1983. Respondent no.1 was thereafter running and managing the transport facility with the 5 assistance of one Mr. Nitin Likhite, a transport supervisor employed by the respondent no.1 Union. The monthly remunerations of Mr. Likhite paid by the respondent no.1 was reimbursed by the petitioner. 4. On 3rd April 2006, a settlement was executed between the petitioner and the respondent no.1 regarding wages and other service conditions of the staff. In terms of clause 4.11.4 of the settlement dated 3rd April 2006 signed by the respondent no.1 Union, it was agreed that with effect from 1st April 2006 the monthly deductions for transport facility would be increased. Further, in terms of Clause 4.11.5 it was agreed that with effect from 1st January 2007, the respondent no.1 Union will not run the transport system for employees at Kharghar, Worli, Head Office or any other location in the future. The said clause 4.11.5 of the settlement dated 3rd April 2006 reads thus : “4.11.5 – Vide supplementary Settlement dated 20th September 1983, clause 14(b), it was agreed that the Management shall subsidise the Transport system organized an administered by the All India Siemens Employees Union for employees at Worli, Head Office, 6 Bombay Office, Andheri, Works Training Centre, godowns. It has now been agreed and decided with the Union that with effect from 1st January 2007, the All India Siemens Employees Union will not run the Transport System for employees at Kharghar, Worli, Head Office, or any other location.” Annexure B-1 to the said settlement dated 3rd April 2006 reads thus : “The Union is presently managing transport service for HOB and Kharghar. The Management will takeover the running of the transport for Worli and Kharghar with effect from 01/01/07 from the All India Siemens Employees Union. It is agreed with AISEU that the present transport deductions will be enhanced to five times the present deductions; hence the minimum deduction would be Rs.150 per person per month irrespective of attendance. No refund will be made to the staff employee on any account.” 5. According to the petitioner, admittedly, the settlement dated 3rd April 2006 conferred wage increases and various other 7 benefits upon the staff category workmen, all of whom availed of the said benefits and continue to do so as on date. The settlement is valid and in force till 31st March 2010. Though, under the said settlement, the petitioner was entitled to take over the operation of the transport system from 1st January 2007, the petitioner for its own reasons could not immediately take over the same and allowed respondent no.1 to continue to operate the transport system for the time being. According to the petitioner this was only a temporary postponement or deferment of the takeover of the transport system by the petitioner, and clause 4.11.5 or Annexure B-1 of the settlement dated 3rd April 2006 were neither modified nor varied or altered or waived in any manner. 6. As pointed out by the petitioner, vide letter dated 22nd August 2008 respondent no.2 i.e. the General Secretary of respondent no.1 himself proposed increase in the monthly transport charges for officers and managers from Rs.20/- p.m. to Rs.400/- p.m. and respondent no.2 also forwarded the quotations received from some contractors for some routes. Thereafter in December 2008 the petitioner started process of identifying transport contractors as it was agreed in the terms of settlement dated 3rd April 2006 that the 8 petitioner will take over running of the transport for Worli and Kharghar with effect from 1st January 2007 from the respondent no.1. Though not required, the petitioner kept respondent nos. 1 and 2 and other office bearers of respondent no.1 informed about the search for new contractors with better capabilities. 7. The petitioner thereafter called for quotations from several transport contractors. The petitioner found the quotation of M/s. Rebello Transporters and M/s. Sai Care Logistics Pvt. Ltd. proper and satisfactory in all respects and especially from the point of view of their capability for providing modern fleet of better quality buses. Letters of Intent dated 12th May 2009 were issued by the petitioner to M/s. Rebello Transporters and M/s. Sai Care Logistics Pvt. Ltd. The same are annexed as Exhibits D-1 and D-2 to the Petition. 8. On 13th May 2009 the respondent no.2 had discussions with Ms. Kavita Ghadge, Executive Vice President of the petitioner when he was informed that Letters of Intent had been issued to the said two contractors. The respondent no.2 requested Ms. Ghadge to employ Mr. Nitin Likhite, Transport Co-ordinator of the respondent no.1 in the employment of the petitioner since he would be rendered 9 jobless after the petitioner took over the management of transport system. Respondent no.2 suggested that Mr. Nitin Likhite be made a permanent employee of the petitioner with continuity in service. Respondent no.2 vide letter dated 14-5-2009 while making certain false and baseless allegations questioned Ms. Ghadge as to why four out of the existing thirteen contractors, viz. M/s. Buthello, M/s. Varun Mazda, M/s. Alankar and M/s. Khan Transport were not called for discussions. The respondent no.2 also suggested that Volvo buses should not be engaged, there should be good quality of buses at competitive price, but excessive spending should be avoided to get the same facility. The contents of the letter also shows that the Union and the office bearers were aware that the transport system was being taken over by the petitioner and the respondent no.1 had no objection to the same, except with regard to engagement of four of their favoured contractors, absorption of their employee Shri Likhite, and the alleged excessive spending by the petitioner. 9. Though there was absolutely no obligation or requirement for the petitioner, pursuant to the suggestion of respondent no.2 the contractors recommended by the Union were invited for discussions in 10 order to participate in the process of selection of new contractors by the Company. After the third and final round of discussions at which the four erstwhile contractors whose candidature was being pushed by the Union also participated in full, the specifications and rates were frozen. The quotation of the contractors M/s. Rebello Transport and M/s. Sai Care Logistics Pvt. Ltd. continued to be proper and satisfactory in all respects and the Company in exercise of its reasonable and lawful discretion decided to award the new contracts to them, and not to four out of the thirteen erstwhile contractors who were being promoted by the Union. According to the petitioner, the chart annexed at Exhibit ‘F’ to the petition belies the allegation made by the respondent no.1 that the petitioner is paying far in excess to the new contractors than what is paid to the existing contractor. In any event, respondent No.1 has no locus to question the petitioner qua the payment terms agreed by and between the petitioner and new contractors. 10. The petitioner by its letter dated 25th June 2009 addressed to respondent no.2 after referring to the discussion held on 13th May 2009 and 20th May 2009 inter alia recorded :- 11 (i) that by settlement between the petitioner and respondent no.1 dated 3rd April 2006 it was agreed that the management was to take over the running of transport for Worli and Kharghar with effect from 1st January 2007 from the Union and that the management has now decided to take over the running of transport including the administration with effect from 1st August 2009 (ii) the management has also decided to introduce a new fleet of buses and in view of the same respondent nos. 1 and 2 were requested to issue necessary notices of termination of the contract by giving one month notice to the existing bus contractors. Though an endorsement was made on the copy of the said letter dated 25th June 2009 by the respondents to the effect that they do not agree with the one sided action plan and they need a meeting with the C.E.O. pertaining to the said issue and that till that time the petitioner should hold the action, the reply of respondent nos. 1 and 2 dated 10th July 2009 to the petitioner’s letter dated 25th June 2009 12 (Exhibit H to the Petition) is very relevant. In the said reply letter, the respondents have not taken/recorded any objection/s to the effect that under the settlement dated 3rd April 2006 the petitioner was required to take over the transport facility with effect from 1st January 2007 and having not done so, the petitioner cannot do it in the years 2008/2009 and have to wait upto the year 2010. In the said reply, there is not a whisper made about the alleged MOU dated 5th May 2008. The only objection found in the reply dated 10th July 2009 is that the petitioner should have whilst chalking out the proposal of starting the transport afresh given preference to the existing contractors and that only two contractors are short listed for the 25 buses to be plied at Worli and Khargar with a very high budget amount. It is categorically stated in the said reply that since the management is going ahead with the implementation of clauses of the long term settlement signed on 3rd April 2006 by taking over the management of the transport from the Union, why are the clauses of the other Long Term Settlement dated 25th June 1998 and the Kharghar MOU dated 10th March 1997 not honoured and abided by the petitioner. By another email dated 14th July 2009 respondent no.2 once again requested the CFO of the 13 petitioner to review the entire subject in toto to have a better cost control and smooth functioning in line of the message of the CEO to cut down the cost, avoid lavish spendings and be in line with compliance. 11. In the meantime, the new contractors placed orders for new buses by spending several lakhs of rupees and also submitted bank guarantees of Rs.8,46,000/- each. On 27th August 2009 formal contracts were executed between the petitioner and M/s. Rebello Transport and M/s. Saicare Logistic Pvt. Ltd. respectively on the other to provide transport facilities to the petitioner employees with effect from 1-9-2009 by providing new buses. 12. The petitioner has stated that immediately upon learning that the contracts were not awarded to their chosen candidates, the respondent no.1 approached the officers of the petitioner and threatened to indulge in violent, coercive and aggressive action and demonstrations if the contracts executed on 27-8-2009 with the new contractors were not revoked/cancelled and awarded to the contractors recommended by the respondents within 24 hours. According to the petitioner out of about 800 employees who are availing the transport 14 facilities, only 19 are amongst the staff covered under the settlement and represented by the respondent no.1 . Thus except for 19 employees covered under the settlement, the respondent no.1 is in no manner whatsoever concerned with the transport facilities provided to the other employees of the petitioner. The respondent no.1 in its capacity as Trade Union is concerned only with the facility of transport and/or the subsidy provided for the purpose and has no right whatsoever to dictate how the facility should be provided or by or through whom. The petitioner was therefore compelled to file a complaint being (ULP) No.374/2009 against the respondent nos. 1 and 2 for restraining them from indulging in coercive action. Simultaneously the respondent no.1 filed a complaint of unfair labour practices against the petitioner being (ULP) No.375/2009 alleging unfair labour practices under Items 9 and 10 of Schedule IV to the Industrial Disputes Act 1947 and also made an application for interim reliefs which was disposed of by the Order impugned herein dated 31-8-2009 directing the petitioner herein (respondent therein) to continue the transport system as agreed between both the parties as per MOU dated 5-5-2008 till 31-3-2010. 15 13. The Learned Senior Advocate appearing for the petitioner has thereafter taken this court through the impugned order. The Industrial Court has recorded in Paragraph 9 of its order, that the settlement dated 3rd April 2006 appears to be the latest settlement. The Industrial Court has further recorded that in the said settlement dated 3-4-2006 it was agreed between the parties that the management would take over the running of the transport from 1-1-2007 and for reasons best known to them, they did not implement the said clause. The Management therefore by not adhering to the cut-off date has violated the said clause of the settlement and continued earlier transport arrangement system. The arrangement between the petitioner and the respondents about the transport system prevailing on the date of the complaint/order is therefore governed by earlier settlement/usages/customs. The Industrial Court has held that it is therefore not possible for the petitioner without giving any notice of change u/s.9A of the Industrial Disputes Act to change the transport system . The Industrial Court thereafter proceeded to hold that the File Note dated 5-5-2008 wherein it has been agreed that from 1-4-2008 the bus contractors will raise the bill directly on the petitioner and after 16 receiving the payment from the respondents shall hand over the cheques to the respondents for disbursement, is the latest MOU. The change therefore which the petitioner wants to effect in the transport system by taking assistance of the said clause in the settlement dated 3-4-2006 is with undue haste, in violation of Section 9A of the Industrial Disputes Act. It is further held that in view of the said violation it is prima facie proved that the action of the petitioner is in breach of the provisions of law, settlement, service condition and thereby the petitioner has engaged in unfair labour practice within the meaning of Item 9 of Schedule IV of the MRTU & PULP Act . The balance of convenience is therefore not in favour of the Plaintiff. The Industrial Court has further proceeded to interpret the purported MOU dated 5-5-2008 and has held that according to the MOU dated 5-5-2008 to suggest the name of the contractor is the right of the Complainant and to decide the amount payable to the contractor for transport system is the right of the petitioner and even the court cannot decide who shall be the contractor and who shall decide the payment amount of the contractor. The Industrial Court therefore by its impugned order directed the petitioner to continue the transport system 17 “as agreed between both the parties as per MOU dated 5/5/2008 till 31/3/2010” . 14. The Learned Senior Advocate appearing for the petitioner has submitted that the direction of the Industrial Court can only be termed as “startling” since the Industrial Court has come up with an imaginary MOU dated 5-5-2008 even though the complaint does not even mention that a purported MOU dated 5-5-2008 pertaining to the Transport System was executed between the parties. The Industrial Court has issued a completely unworkable direction to the effect that the Complainant Union alone is entitled to choose a transport contractor while the petitioner alone is entitled to decide the terms of contract with such contractors even though such a direction does not even flow from the so-called “MOU”. It is submitted that the Industrial Court has issued these untenable, unjustified and totally unsustainable directions in a case where it was clear from the record :- (i) that the complainant Union has indulged in gross suppression of material facts; (ii) that the Union had no right to run the transport after the settlement dated 3-4-2006 expressly provided that no part 18 of the transport system would be run by the Union in future; (iii) that no rights or service conditions of the workmen were in any manner effected by the management taking over the running of the transport system as per the settlement dated 3-4-2006; (iv) that no item of the Fourth Schedule was in any manner attracted and therefore Section 9A had no application. (v) that there was no adverse effect on either the Union or the Workmen; and (vi) that in any event Section 9-A expressly excluded any change which was brought about pursuant to a settlement. 15. The Learned Senior Advocate appearing for the petitioner has submitted that ,despite the fact that it was apparent that the Complainant Union had a hidden and malafide intention of helping certain erstwhile transport contractors to perpetuate their contracts even though they were providing sub-standard services and dangerous buses, the Industrial Court proceeded to grant the said unsustainable interim reliefs to the Union. The Industrial Court has issued sweeping 19 directions by completely overlooking the fact that no prima facie case whatsoever was made out by the respondents. That the balance of convenience was clearly against grant of such interim reliefs and that while irreparable injury would be caused to the petitioner as well as its employees and new transport contractors due to grant of interim reliefs, no detriment or injury of whatsoever nature can or would be caused to the Union or its 19 members if the reliefs were declined. Most importantly the Industrial Court ignored the fact that third party rights had come into existence on account of the delay in filing the Complaint. The impugned order was passed in the absence of the said third parties who would be gravely prejudiced by the impugned order. 16. The Learned Advocate appearing for the respondents submitted that the respondents have in detail set out in their reply Affidavit dated 22nd September 2009 (the said reply) how the transport system was going on since 1983 till 2006. However, in the year 2006 the petitioner by fraud and misrepresentation introduced Clause 4.11.5. Hence the same was never acted upon on and form 1-1-2007 or from any other date. In the meantime by an agreement by way of a File Note dated 5-5-2008 it was agreed that with effect from 1-4-2008 20 (later agreed to be implemented from May 2008) to make the monthly payment to all the bus transporters directly as per the process laid down : (i) Bus Contractors will raise the bill directly on Siemens Limited (ii) Contractors will submit the bill to AISEU; (iii) AISEU will verify/certify the bill and submit to the personnel department for payment with due remarks (iv) Siemens Limited will prepare the cheques in favour of the Bus Transporters and hand over the cheques to AISEU for further action (disbursement). It is submitted that the effect of the terms of settlement dated 3-4-2006 are replaced by the said File Note terms. It is further submitted that the terms of settlement dated 3-4-2006 has lost effect since the petitioner neither implemented the same nor took any step in that direction. On the contrary the Union by their letter dated 22-8-2008 not only put forth the problems in running the buses in low budget but also suggested certain measures to improve the same by increasing the employees contribution, revision in some of the routes, clubbing the 21 bus routes and also submitted the quotation received from the present contractors 17. It is further submitted by the Learned Advocate appearing for the respondents that on 13-5-2009 the Vice President H.R. of the petitioner Company for the first time raised the issue of taking over of the transport system which was objected by the respondents’ Letter dated 14-5-2009. The petitioner instead of arriving at a amicable solution/settlement by their letter dated 25-6-2009 informed the respondents about their decision to take over the transport system which was objected to by the respondents not only by their remark on the said letter itself but also by their letters dated 10-7-2009 and 14-7-2009. On 11th August 2009 the management made their intention clear in their circular dated 11-8-2009 (Exhibit I to the said reply) that “the management will review the transport facility from time to time to improve the quality of the buses and to optimize the services. Management reserves the right to