LPA No.1142 of 2009 1 In the High Court of Punjab and Haryana, Chandigarh. LPA No.1142 of 2009 Date of Decision: 03.11.2009 National Textile Corporation Ltd. ....Appellant. Versus Kharar Woollen Workers Union (Regd.), Kharar and others ....Respondents. Coram:- Hon'ble Mr.Justice J.S. Khehar Hon'ble Mr. Justice Mehinder Singh Sullar Present: Mr. H.N. Mehtani, Advocate for the appellant. ... J.S. Khehar, J. 1. The National Textile Corporation Ltd. (hereinafter referred to as the NTC) has preferred the present Letters Patent Appeal, so as to assail the decision rendered by this Court on 4.9.2009, disposing of Civil Writ Petition No.5079 of 1994. Before dealing with the contentions advanced by the learned counsel for the appellant, it is necessary to narrate three sets of facts. These facts are being recorded in the following three paragraphs. 2. Respondents No.2 and 3 were employed by the erstwhile management of M/s. Panipat Woollen Mills, Kharar (hereinafter referred to as the PWM). The PWM came under the possession of the Industrial Finance Corporation under a mortgage. Thereafter, on the basis of a LPA No.1142 of 2009 2 scheme approved by this Court, it was leased to M/s. Padamshree Textile Ltd. (hereinafter referred to as the PTI) with effect from 25.6.1972. The services of respondents No.2 and 3, accordingly, came to be transferred to the PTI. The employees of the PTI went on a protest strike. However, when the said employees, including respondents No.2 and 3, reported for duty on 16.11.1972, they were not permitted to enter into their working quarters. Dissatisfied with the action taken by the PTI, the concerned employees, including respondents No.2 and 3, issued demand notices. On the failure of the management to take any action on the demand notices, and thereafter on the failure of conciliation proceedings which followed, the State government made a reference of the dispute raised by the aforesaid workers, including respondents No.2 and 3, to the Presiding Officer, Labour Court, Patiala (hereinafter referred to as the Labour Court). On 27.2.1974, the Labour Court consolidated all the 26 references made to it by the State government for collective adjudication. Vide an order dated 30.4.1975, the Labour Court answered the references in favour of the workers, including respondents No.2 and 3. It was held that the workers were entitled to reinstatement with continuity in service. However, while ordering their reinstatement, the Labour Court denied payment of back wages to them. In this behalf, the Labour Court held, that the workers for the period under reference should be treated as on ‘leave of the kind due’. And in case, no leave was due to them, then on ‘leave without pay’. It is not a matter of dispute, that the aforesaid proceedings initiated by respondents No.2 and 3 against the PTI have attained finality. 3. Consequent upon the passing of the award of the Labour Court dated 30.4.1975, the petitioners claimed reinstatement into service. A large LPA No.1142 of 2009 3 number of such representations were appended to Civil Writ Petition No.5079 of 1994 as annexures. Obviously, since the workmen in question, including respondents No.2 and 3, were not reinstated into service, they were also not paid any wages. It is, therefore, that respondents No.2 and 3 filed an application under Section 33-C(2) of the Industrial Disputes Act, 1947 (hereinafter referred to as the ID Act) on 22.8.1977, claiming wages from the date of passing of the award of the Labour Court (i.e. with effect from 30.4.1975) till the filing of the application under Section 33-C(2) of the ID Act (i.e. till 22.8.1977). The aforesaid application filed under section 33-C(2) of the ID Act, was allowed by the Labour Court on 5.4.1982. The Labour Court arrived at the conclusion, that the NTC was a successor in interest of the PWM/PTI, and as such, was liable to pay the amount claimed by the petitioners. Dissatisfied with the aforesaid award of the Labour Court dated 5.4.1982, the NTC filed Civil Writ Petition No.3106 of 1982. The aforesaid writ petition was, however, dismissed on 20.10.1982. The NTC then assailed the order passed by this Court before the Supreme Court, wherein also Civil Appeal bearing No.5776 of 1983, filed by the NTC was dismissed on 12.5.1993. Consequently, on 27.7.1993, the NTC deposited Rs.1,19,230/- in satisfaction of the order passed by the Labour Court dated 30.4.1975. 4. On the factual aspect of the matter, it is necessary to extract hereunder paragraphs 2 to 4 of Civil Writ Petition No.5079 of 1994. The aforesaid paragraphs are, accordingly, being reproduced hereunder: - “2. That the petitioners were employed by the erstwhile management of M/s. Panipat Woollen Mills, Kharar, District Ropar. The said Panipat Woollen Mills, Kharar, came under the possession of Industrial Finance Corporation under a mortgage and then under the scheme approved by the Hon’ble LPA No.1142 of 2009 4 High Court, it was leased to M/s. Padamshree Textile Industries Ltd w.e.f. 25.6.1972 to whom the services of the petitioners were also transferred. It may be noted that the Mill’s possession continued with M/s. Padamshree Textile Industries Ltd. although the said Mills was declared sick w.e.f. 1.4.1974 under the Sick Textile Undertaking (Taking over the Management) Act, 1972 and its ownership thereafter vested absolutely in the Central government. Possession continued with M/s. Padamshree Textile Mills Ltd. This was so by virtue of a stay order granted by the Supreme Court in a writ petition filed by M/s. Padamshree Textile Mills Ltd. against the takeover. The said writ petition, however, was subsequently dismissed on 6.4.1976 and the National Textile Corporation got possession of the Mills on 7.4.1976 on behalf of the Central government. It is also submitted that M/s. Padamshree Textile Mills Ltd. to whom the services of the petitioners employees had been transferred, had terminated the services of the petitioners on 16.12.1972 without any justification. 3. That the petitioners got their termination set aside on a reference under Section 10(1)(o) of the Industrial Disputes Act, made to the Labour Court. They were ordered to be reinstated under the award of the Labour Court, Patiala dated 30.4.1975 published in the Punjab Government Gazette dated July 25, 1975. A true copy of the award is attached herewith as Annexure P-1. It may be mentioned that a writ petition filed by M/s. Padamshree Textile Mills Ltd. against this award was dismissed in limini on 1.11.1976 by the Division Bench of this Hon’ble Court. 4. That however, the petitioners were neither reinstated by M/s. Padamshree Textile Mills Ltd. nor provided duty by the National Textile Corporation who had taken over the Mills on 1.4.1974 under the Sick Textile Industries (Nationalisation) Act, 1974 and named it as Panipat Woollen Mills (a unit of National Textile Corporation) D.P.&R., Kharar. Even after taking actual possession of the Mills on 7.4.1976 by the National Textile Corporation, the petitioners were not allowed to join duties as its employees by the NTC who had the ownership and control of the Mills although they are required to be reinstated under the order of the Labour Court especially after the said award was upheld on 1.11.1976 by the Hon’ble High Court.” The NTC responded to the averments made in paragraphs 2 to 4, reproduced hereinabove, in the following manner: - “2 to 4. In reply to paras 2 to 4 of the petition, it is submitted that the present case relates to 26 workers who were employed with Panipat Woolen and General Mills Co. Ltd. prior to the LPA No.1142 of 2009 5 coming into force on 31.10.1972 of Sick Textile Undertakings (Taking over of Management) Act, 1972 (hereinafter referred to as the 1972 Act). The 26 workers concerned were on the rolls of M/s. Padamshree Textile Industries Ltd on 16.11.1972. Panipat Woollen and General Mills Co. Ltd. having mortgaged its Mills, namely, Panipat Woollen Mills and in winding up proceedings the Panipat Woollen Mills having been leased to Padamshree Textile Industries Ltd., which having obtained stay of taking over of management of Panipat Woollen Mills on the enactment of the 1972 Act. Though when the 1974 Ordinance, which was later on enacted into an Act of Parliament came into force with effect from 1.4.1974, the services of 26 workers had already stood terminated by Padamshree Textile Industries Ltd. In the reference relating to the termination of the services of the 26 workers, the parties were Padamshree Textile Industries Ltd. and their workmen and not the answering respondent. The entire proceedings before the Labour Court in the reference continued between the said parties and the answering respondent herein had not been a party to the same at any stage. The award Annexure P-1 was made by the Labour Court on 30th July, 1975 whereby the termination of services of the 26 workers was published on July 25, 1975 whereby the termination of services of the 26 workers was set aside and they were ordered to be reinstated. Padamshree Textile Industries Ltd. challenged the award by filing a writ petition in the High Court which was dismissed. Thereafter, Padamshree Textile Industries Ltd. was ordered by the Hon’ble Supreme Court by order dated 5.4.1976 in Writ petition No.469 of 1974 to hand over possession of Panipat Woollen Mills to answering respondent as the Mill was nationalized under the Sick Textile Undertaking (Nationalization) Act, 1974 and answering respondent took possession of the said Mills on 7.4.1976. Therefore, no liability in respect of the dispute which arose prior to the appointed day can be imposed on the answering respondent and the writ petition is liable to be dismissed.” From the pleadings extracted hereinabove, the following unambiguous conclusions emerge: - (i) Respondents No.2 and 3 were erstwhile employees of the PWM. (ii) The PWM came under the control of Industrial Finance Corporation under a mortgage. (iii) Under the scheme approved by this Court, the PWM was leased to the PTI after the promulgation of the Sick Textile Undertakings (Nationalisation) Act, 1974 (hereinafter referred to as the Textile Act). (iv) The PWM sought judicial redress, seeking a restraint order against the NTC from taking over possession and management of the PWM. On 5.4.1976, the Supreme Court disposed of Writ Petition No.469 of 1974, LPA No.1142 of 2009 6 wherein the aforesaid writ petition was dismissed and the NTC was directed to take possession of the mill. The NTC, accordingly, took over the management and possession of the mill on 7.4.1976. 5. During the course of hearing, the first contention advanced by the learned counsel for the appellant Mr. H.N. Mehtani, is that the award of the Labour Court dated 30.4.1975 could not be implemented against the NTC on account of the fact, that the aforesaid award was rendered against the PTI. It is submitted that the said order could only have been enforced against the PTI. 6. It is not possible for us to accept the first contention advanced by the learned counsel for the appellant. There are two reasons for us not to agree with the learned counsel for the appellant. Firstly, consequent upon the award of the Labour Court dated 30.4.1975, respondents No.2 and 3 initiated proceedings, inter-alia, against the NTC for recovery of wages for the period commencing from the date of the pronouncement of the award (i.e. from 30.4.1975) to the date when the aforesaid application was filed (i.e. on 22.8.1977). The Labour Court by its order dated 5.4.1982, upheld the claim of respondents No.2 and 3 against the NTC. The NTC first challenged the aforesaid order passed by the Labour Court, before this Court,and then, before the Supreme Court unsuccessfully. Consequent upon the failure of the NTC to successfully assail the order passed by the Labour Court dated 5.4.1982,the NTC admittedly paid wages to respondents No.2 and 3 on 27.7.1993. Having paid the aforesaid wages, it is not now open to the NTC to assert, that it had no relationship with respondents No.2 and 3. Secondly, the narration of facts in paragraphs 2 to 4 above reveals, that respondents No.2 and 3 were employees of the PWM. The management and control of the PWM was leased to the PTI. It is, therefore, apparent that the LPA No.1142 of 2009 7 PTI was merely a lessee and had no ownership right over the mill where the respondents were employed. In fact, therefore, the PWM was the real employer of respondents No.2 and 3. This situation changed with the promulgation of the Textile Act, inasmuch, the NTC stepped into the shoes of the PWM. Consequent upon the promulgation of the Textile Act, a challenge was raised at the hands of the PTI, whereupon based on the order passed by the Supreme Court, the NTC was handed over management and possession of the mill in question on 7.4.1976 (i.e. after the dismissal of Writ Petition No.469 of 1974, vide order dated 5.4.1976). In the totality of the facts and circumstances narrated hereinabove, specially for the two reasons noticed hereinabove, there is no doubt whatsoever in our mind, that the first submission raised on behalf of the NTC that the award of the Labour Court dated 30.4.1975 can only be executed as against the PTI, is wholly devoid of merit. 7. The second contention advanced by the NTC i.e. the appellant before this Court is, that the subject matter of the controversy which was adjudicated upon by the Labour Court vide its award dated 30.4.1975 (refer to paragraph 2 above) related to the alleged retrenchment of certain workmen, including respondents No.2 and 3 by the PTI, consequent upon their having been denied entry to their working quarters on 16.11.1972. It is submitted by the learned counsel, that the conclusion drawn by the Labour Court cannot be treated as binding on the NTC on account of the fact, that the earliest date with effect from which the NTC could have acquired the possession and management of the PWM under the Textile Act, could have been 1.4.1974, although, as a matter of fact, the NTC took charge of the mill in question on 7.4.1976. In this behalf, it is submitted LPA No.1142 of 2009 8 that all the workmen, including respondents No.2 and 3, were not on the rolls of the NTC either on 1.4.1974 or even upto 6.4.1976, and as such, under no stretch of imagination they can be considered to be the employees whose services came to be vested in the NTC on the basis of the provisions of the Textile Act. 8. The second submission advanced by the learned counsel for the appellant, as has been noticed in the foregoing paragraph, is also totally misconceived. In fact, it does not lie in the mouth of the appellant to raise any such plea, after the determination rendered by the Supreme Court in Writ Petition No.469 of 1974, whereby, the NTC was granted possession and control of the mill under reference on 7.4.1976. After the award of the Labour Court dated 30.4.1975, proceedings were initiated by a number of employees, including respondents No.2 and 3, under Section 33-C(2) of the ID Act, wherein the Labour Court, this Court, as also, the Supreme Court recorded that the onus and responsibility, for payment of wages to the workmen including respondents No.2 and 3, rested on the shoulders of the NTC. The NTC could have been made liable to pay the aforesaid wages only if respondents No.2 and 3 were its employees. Since the Supreme Court by its aforesaid determination has required the NTC to shoulder the aforesaid responsibility (as a matter of execution of the award of the Labour Court dated 30.4.1975) and since the NTC has actually honoured the same by paying wages to the said employees on 27.7.1993, the instant submission does not lie in the mouth of the appellant. We were informed that the instant submission was raised by the NTC during the course of the proceedings in Civil Appeal No.5776 of 1983 (wherein, the NTC had impugned the order passed by the Labour Court dated 5.4.1982, challenging LPA No.1142 of 2009 9 its direction to the NTC to pay wages to the workmen). It is, therefore, clear that the instant plea that the retrenchment of respondents No.2 and 3, and thereupon their reinstatement, has nothing to do with the NTC, is certainly not permissible in law. We, accordingly, find no merit in the instant contention as well. 9. The third submission advanced by the learned counsel for the appellant, was based on Section 5 of the Textile Act. Section 5 of the aforesaid Act, relied upon by the learned counsel for the appellant, is being extracted hereunder: - “5. Owner to be liable for certain prior liabilities.- Every liability, other than the liability specified in sub-section (2) of the owner of a sick textile undertaking, in respect of any period prior to the appointed day, shall be the liability of such owner and shall be enforceable against him and not against the Central Government or the National Textile Corporation. (2) Any liability arising in respect of— (a) loans advanced by the Central Government, or a State Government, or both, to a sick textile undertaking (together with interest due thereon) after the management of such undertaking had been taken over by the Central Government, (b) amounts advanced to a sick textile undertaking (after the management of such undertaking had been taken over by the Central Government), by the National Textile Corporation or by a State Textile Corporation, or by both, together with interest due thereon, (c) wages, salaries and other dues of employees of the sick textile undertaking, in respect of any period after the management of such undertaking had been taken over by the Central Government, shall, on and from the appointed day, be the liability of the Central Government and shall be discharged, for and on behalf of that Government, by the National Textile Corporation as and when repayment of such loans or amounts becomes due or as and when such wages, salaries or other dues become due and payable. (3) For the removal of doubts, it is hereby declared that,— (a) save as otherwise expressly provided in this section or in any other section of this Act, no liability, other than the liability specified in sub-section (2), in relation to a sick textile undertaking in respect of any period prior to the appointed day, shall be enforceable against the Central Government or the National Textile Corporation; LPA No.1142 of 2009 10 (b) no award, decree or order of any court, tribunal or other authority in relation to any sick textile undertaking passed after the appointed day in respect of any matter, claim or dispute, in relation to any matter not referred to in sub-section (2), which arose before that day, shall be enforceable against the Central Government or the National Textile Corporation; (c) no liability of any sick textile undertaking or any owner thereof for the contravention, before the appointed day, of any provision of law for the time being in force, shall be enforceable against the Central Government or the National Textile Corporation. Explanation.—ln this section, "State Textile Corporation" means a corporation, formed and registered under the Companies Act, 1956, in a State, which is incharge of the management of a sick textile undertaking either as a person authorised under the Industries (Development and Regulation) Act, 1951, or as the Custodian under the sick textile Undertakings (Taking Over of Management) Act, 1972 and includes the West Bengal State Textile Corporation Limited which has advanced amounts to sick textile undertakings in the State.” On the basis of the aforesaid provision, it is the vehement contention of the learned counsel for the appellant, that the liability, if any, pertaining to respondents No.2 and 3 has to be that of the previous management, namely, the PTI, and as such, the award dated 30.4.1975 can be implemented only as against the PTI. 10. We are afraid that we find no merit even in the third submission advanced by the learned counsel for the appellant. The Supreme Court while dismissing Civil Appeal No.5776 of 1987 on 12.5.1993, required the appellant i.e. the NTC to shoulder the responsibility of wages of respondents No.2 and 3 for the period from 30.4.1975 to 22.8.1977. On the same analogy, if wages are again demanded by respondents No.2 and 3, the onus thereof shall squarely rest on the shoulders of the appellant i.e. the NTC. Even the mandate of Section 5(2)(c) clearly requires wages, salary and other dues of employees of the sick textile undertakings, after the LPA No.1142 of 2009 11 management of such undertaking has been taken over by the Central government, shall be that of the Central government (which shall be discharged through the NTC). After the aforesaid determination the NTC i.e. the appellant before this Court, shall also be liable to shoulder the responsibility of wages for any subsequent period also, if claimed. Yet the NTC strongly advances the submission during the course of the present appeal before this Court to suggest, that although it has the legal obligation to pay respondents No.2 and 3, it cannot be persuaded to reinstate them. This submission itself, to our mind, reflects a non-application of mind at the hands of the appellant. The instant contention, in our view can only be described as an unreasonable persistence at the hands of the NTC to brow- beat a weaker opponent. The NTC having got a verdict from the Supreme Court, should have respected it, rather than having chosen to repeatedly assail the claim of the workmen by raising the same submission by show- casing the same submission differently. 11. The third submission advanced by the learned counsel for the appellant can also be examined from a different perspective, so as to arrive at the same conclusion. The learned Single Judge while rejecting the instant contention, made a reference to Section 14 of the Textile Act to reject the submission advanced by the NTC. Section 14 aforesaid is being extracted hereunder: - “14. Employment of certain employees to continue.- (1) Every person who is a workman within the meaning of the Industrial Disputes Act, 1947, and has been, immediately before the appointed day, employed in a sick textile undertaking shall become, on and from the appointed day, an employee of the National Textile Corporation, and shall hold office or service in the National Textile Corporation with the same rights and privileges as to pension, gratuity and other matters as would have been admissible to him if the rights in relation to such LPA No.1142 of 2009 12 sick textile undertaking had not been transferred to, and vested in, the National Textile Corporation, and shall continue to do so unless and until his employment in the National Textile Corporation is duly terminated or until his remuneration, terms and conditions of employment are duly altered by the National Textile Corporation. (2) Every person who is not a workman within the meaning of the Industrial Disputes Act, 1947, and who has been, immediately before the appointed day, employed in a sick textile undertaking shall, in so far as such person is employed in connection with the sick textile undertaking which has vested in the National Textile Corporation, become, as from the appointed day, an employee of the National Textile Corporation and shall hold his office or service therein by the same tenure, at the same remuneration and upon the same terms and conditions and with the same rights and privileges as to pension and gratuity and other matters as he would have held the same under the sick textile undertaking if it had not vested in the National Textile Corporation and shall continue to do so unless and until his employment in the National Textile Corporation is duly terminated or until his remuneration, terms and conditions of employment are duly altered by the National textile Corporation: Provided that in respect of any sick textile undertaking the management of which could not be taken over by the Central Government under the Sick Textile Undertakings (Taking Over of Management) Act, 1972, by reason of any decree, order or injunction of