1 IN THE HIGH COURT OF JUDICATURE FOR RAJASTHAN AT JODHPUR :::: ORDER 1. S.B. CIVIL WRIT PETTION NO.486/2006- MANAGER, SPINNING UNIT GANGAPUR NOW KNOWN AS SPINNING AND GINNING MILLS FEDERATION VS. STATE OF RAJASTHAN & ORS. 2. S.B. CIVIL WRIT PETTION NO.487/2006- MANAGER, SPINNING UNIT GANGAPUR NOW KNOWN AS SPINNING AND GINNING MILLS FEDERATION VS. STATE OF RAJASTHAN & ORS. 3. S.B. CIVIL WRIT PETTION NO.500/2006- MANAGER, SPINNING UNIT GANGAPUR NOW KNOWN AS SPINNING AND GINNING MILLS FEDERATION VS. STATE OF RAJASTHAN & ORS. 4. S.B. CIVIL WRIT PETTION NO.374/2006- MANAGER, SPINNING UNIT GANGAPUR NOW KNOWN AS SPINNING AND GINNING MILLS FEDERATION VS. STATE OF RAJASTHAN & ORS. 2 5. S.B. CIVIL WRIT PETTION NO.493/2006- MANAGER, SPINNING UNIT GANGAPUR NOW KNOWN AS SPINNING AND GINNING MILLS FEDERATION VS. STATE OF RAJASTHAN & ORS. 6. S.B. CIVIL WRIT PETTION NO.492/2006- MANAGER, SPINNING UNIT GANGAPUR NOW KNOWN AS SPINNING AND GINNING MILLS FEDERATION VS. STATE OF RAJASTHAN & ORS. 7. S.B. CIVIL WRIT PETTION NO.491/2006- MANAGER, SPINNING UNIT GANGAPUR NOW KNOWN AS SPINNING AND GINNING MILLS FEDERATION VS. STATE OF RAJASTHAN & ORS. 8. S.B. CIVIL WRIT PETTION NO.488/2006- MANAGER, SPINNING UNIT GANGAPUR NOW KNOWN AS SPINNING AND GINNING MILLS FEDERATION VS. STATE OF RAJASTHAN & ORS. 9. S.B. CIVIL WRIT PETTION NO.494/2006- MANAGER, SPINNING UNIT GANGAPUR NOW KNOWN AS SPINNING AND GINNING MILLS FEDERATION VS. STATE OF RAJASTHAN & ORS. 3 10.S.B. CIVIL WRIT PETTION NO.495/2006- MANAGER, SPINNING UNIT GANGAPUR NOW KNOWN AS SPINNING AND GINNING MILLS FEDERATION VS. STATE OF RAJASTHAN & ORS. 11.S.B. CIVIL WRIT PETTION NO.497/2006- MANAGER, SPINNING UNIT GANGAPUR NOW KNOWN AS SPINNING AND GINNING MILLS FEDERATION VS. STATE OF RAJASTHAN & ORS. 12.S.B. CIVIL WRIT PETTION NO.499/2006- MANAGER, SPINNING UNIT GANGAPUR NOW KNOWN AS SPINNING AND GINNING MILLS FEDERATION VS. STATE OF RAJASTHAN & ORS. UNDER ARTICLES 226 AND 227 OF THE CONSTITUTION OF INDIA. DATE OF ORDER : 16th October, 2006 PRESENT HON'BLE MR.MOHAMMAD RAFIQ,J. REPORTABLE Mr.Rajesh Joshi, Advocate, for petitioners. Mr.Tribhuwan Gupta, Advocate, for respondents. 4 BY THE COURT: - All these writ petitions raise a common question of law having been filed by the common petitioner, although founded on different set of facts and, therefore, are being decided by this common judgment. In all the writ petitions, common orders passed by the Industrial-cum-Labour Court, Bhilwara (in short 'the Labour Court') have been challenged. For the purpose of convenience, however, facts of first of the above writ petitions namely, S.B. Civil Writ Petition No.486/2006 are being referred to in the judgment. The petitioner is a registered Cooperative Society under the provisions of Rajasthan Cooperative Societies Act, 1965 (in short the Act of 1965). Prior to formation of SPINFED in the State of Rajasthan, there were four Cooperative Spinning Mills formed by the State Government which were registered under the Act of 1965. They were known as Gangapur Spinning Mills, Gulabpura Spinning Mills, Hanumangarh Spinning Mills and Gulabpura Cotton Ginning Pressing Cooperative Society Ltd. 5 Gulabpura. The Registrar of the Cooperative Societies in exercise of the powers conferred upon him under Section 17 of the Act of 1965 read with Rule 13 of the Rajasthan Cooperative Societies Rules, 1966 (in short 'the Rules of 1966') amalgamated all the aforesaid four Cooperative Societies into one entity now known as Rajasthan State Cooperative Spinning and Ginning Mills Federation Ltd, namely, the petitioner herein. This amalgamation was intended to improve financial condition of the societies. According to the petitioner-federation, nearly 4500 employees are engaged in its four units and in order to enable them to come out of the financial crisis and to avoid winding up and closure thereof, the petitioner-federation has taken loan amounting to crores of rupees from State Government and also from the other financial institutions. This was aimed at reviving the units. When this did not help, the State Government in exercise of its powers conferred under Section 3 of the Rajasthan Relief Undertakings (Special Provisions) Act, 1961 (in short the Act of 1961) declared the petitioner-federation as a relief undertaking by notification dated 19.10.2001 and thereby exempted it from the purview of 6 the laws like (i) Industrial Employment (Standing Order) Act, 1946, (ii) Industrial Disputes (Rajasthan Amendment) Act, 1958 and (iii) Industrial Disputes Act, 1947. This notification was initially issued for a period of one year but this period has been further extended by subsequent notifications each time for one year issued respectively on 16.10.2002, 18.9.2003, 5.10.2004 and 27.10.2005. The petitioner-federation therefore continues to be a relief undertaking even to this date. While in seventeen cases in which impugned order has been passed the appropriate Government made reference of the industrial dispute to the learned Labour Court, Bhilwara on the question of validity of the respondent-workmen and further if their termination order was held illegal, what relief could be granted to him. In the remaining two however applications under Section 33C(2) of the Industrial Disputes Act, 1947 (in short the Act of 1947) were filed by the workmen. During the pendency of the proceedings in all these cases before the learned Labour Court, the petitioner-federation was declared a relief undertaking. It thereupon moved an application before 7 the learned labour court for staying the proceedings in the aforesaid cases on the ground that it was by virtue of Section 3 of the Act of 1961 exempted from the application of provisions of the Industrial Disputes Act, 1947 (in short the Act of 1947). The learned labour court initially vide its order dated 26.11.2000 stayed the proceedings and, thereafter, further extended this order of stay by order dated 13.10.2003. Lastly, when the Government vide its notification dated 27.1.1995 again extended the term for the petitioner-federation as a relief undertaking by one more year for the period from 12.10.2005 to 11.10.2006, the petitioner again requested the learned labour court for continuing the stay upto 11.10.2006. Such a request was made in all 19 cases including those out of which aforesaid 12 writ petitions arise. The learned labour court however after hearing the arguments of the parties and consideration of law on the subject vide a common order dated 23.11.2005 rejected the application for extension of stay in all these cases holding that the proceedings before the labour court under the Act of 1947 cannot be stayed for an indefinite period. Aggrieved by this common order passed by the learned 8 labour court, the petitioner-federation has preferred these writ petitions. I have heard Shri Rajesh Joshi, learned counsel for the petitioner and Shri Tribhuwan Gupta, learned counsel for the respondents. Shri Rajesh Joshi, learned counsel for the petitioner has argued that the petitioner-federation is passing through real financial crises and therefore efforts are being made unitedly by the Government and various financial institutions to revive it. Such an object was in the over all interest of large number of workers of the federation and the economy of the State. It is with this object in view that the State Legislature enacted the Act of 1961, which has received the assent of the President of India on 31st March, 1961. He argued that the Act of 1961 being a special law would prevail over all other general laws including the Act of 1947. It was argued that Section 3 of the Act of 1961 empowers the State Government to declare the petitioner – federation as a relief undertaking and accordingly, 9 the State Government initially declared the petitioner – federation as relief undertaking vide notification dated 19.10.2001 for a period of one year and, thereafter, extended such period from time to time for one year by each of the notifications issued from time to time and lastly by notification dated 27.10.2005. Period of such status of the petitioner – federation having now been extended upto 11.10.2006, the learned labour court was required to stay the proceedings at least upto that date. The impugned order is therefore liable to be quashed and set aside. It was argued that when the proceedings were earlier stayed by the learned labour court vide its order dated 26.11.2002 on consideration of the fact that petitioner – federation is a relief undertaking and would be exempted from the provisions of the Act of 1947, it had no power then to review the said order at a later stage. Shri Rajesh Joshi further argued that none of the judgments relied upon by the learned labour court in the impugned order refusing to stay the proceedings pertains to the provisions of the Act of 1961 or any other analogous law. 10 All those cases were on generality of the subject with regard to practice and procedure of the labour courts and their duty to decide and adjudicate upon the reference which is made. He also referred to the statement of objects and reasons and preamble of the Act of 1961 to show that the said Act was enacted with a view to providing relief to industrial undertakings, which are on the verge of collapse. It was therefore argued that the writ petition may be allowed. Shri Rajesh Joshi, learned counsel for the petitioner has relied upon the Division Bench judgment of this Court in Modern Syntax (I) Ltd. Vs. Debts Recovery Tribunal, Jaipur & Ors reported in RLR 2001(1) 476 and in M/s. Jaysynth Dyechem Vs. Mewar Taxtile Mills Ltd reported in RLR 1987 (I) 513 and argued that the Act of 1961 being a special law, this Act would prevail upon all other general laws including the Act of 1947. According to Shri Rajesh Joshi, once the notification under Section 3 of the Act of 1961 was issued by the Government, the provisions of Section 4 of the Act would apply and the consequence given therein would immediately follow. According to Section 4, any laws mentioned in the schedule of the Act of 1961 and any 11 provisions thereof shall not apply to a relief undertaking and it shall be exempted thereform and further no suit or legal proceedings should be instituted or commenced or, if, pending, shall be proceeded with, against any industrial undertaking during the period in which it remains a relief undertaking. He therefore argued that the order passed by the learned labour court may be set aside and the proceedings pending before it be directed to be stayed till the petitioner – federation continues to remain a relief undertaking. On the other hand, Shri Tribhuwan Gupta, learned counsel for the respondent – workmen in opposing the writ petitions supported the order passed by the learned labour court on the reasonings given therein. He argued that initially the labour court had by its order dated 26.12.2002 stayed the proceedings upto 11.10.2003. At subsequent stage however when occasion again arose to consider a similar request, the learned labour court was fully justified in deciding the matter afresh and in refusing to stay the proceedings for further period because the proceedings before the learned labour court under 12 the Act of 1947 could not stayed indefinitely. He argued that the Act of 1947 by itself is a special provision, which intended to assure timely disposal of industrial disputes and imparting justice to the working class by way of speedy remedy. According to Shri Gupta, the Act of 1947 being itself a special legislation and moreover being a central legislation, should prevail upon the State Legislation like the Act of 1961. He reiterated his reliance on all those judgments, which were cited before the learned labour court and were relied upon by learned labour court while refusing to stay the proceedings. Shri Gupta specifically drew attention of the court to that part of the notification issued by the State Government under Section 3 of the Act of 1961, which provides that the notification would have no effect on the entitlement of a workman to payment of wages pursuant to any law, legal proceedings, claim, settlement, award and standing order. According to Shri Gupta, apart from the reference cases, some of the cases arose out of proceedings under Section 33C(2), which pertain to payment of wages. The bar contained in Section 3 of the Act of 1961 as to maintainability of legal 13 proceedings with reference to Section 4 of the Act of 1961 would in any case, be not applicable to the proceedings under Section 33C(2). He therefore argued that the order passed by the learned labour court is perfectly legal and justified and the writ petitions are liable to be dismissed. I have given my thoughtful consideration to the arguments advanced by both the learned counsel and perused the record. The learned labour court while rejecting the application of the petitioner has not only taken into account the Section 3 of the Act of 1961, but has also taken into account the provisions contained in Section 4 of the Act of 1961. It has however, held that the reference made to it by the appropriate Government under Section 10 of the Act of 1947 and the application filed under Section 33C(2) for computation of the due amount are both required to be decided in a time bound manner. Section 10A of the Act of 1947 requires that if the appropriate Government has not prescribed any time limit for determination 14 of dispute, the reference has to be answered within a period of three months. The learned labour court noted although such period is extendable but the extension cannot be made for an indefinite time. Similarly, an application under Section 33C(2) is also required to be decided within a period of three months. The learned labour court has also relied on the provisions of Section 25J of the Act of 1947 which contains the provisions in relation to effect of laws inconsistent with Chapter VA of the said Act and provides that provisions of said Chapter would have effect notwithstanding anything inconsistent therewith contained in any other law including standing orders made under the Industrial Employment (Standing Orders) Act, 1946. This is however subject to proviso that in case the workman is entitled to benefits more favourable to him under any such other enactment, then those benefits to which he would have been entitled to under the Act of 1947, he shall continue to be entitled to such more favourable benefits. Sub-section (2) of Section 25J further provides that nothing contained in Chapter VA shall be deemed to affect the provisions of any other law for the time being in force in any State in so far as that law 15 provides for the settlement of industrial disputes, but the rights and liabilities of employers and workmen in so far as they relate to lay-off and retrenchment shall be determined in accordance with the provisions of this Chapter. The learned labour court therefore held that the notification issued under Section 3 of the Act of 1961 could not have the effect of permanently staying the proceedings pursuant to reference made under the Act of 1947 as the later Act, apart from being a Central enactment, is a labour welfare legislation. Even if there be any conflict between two, the Act of 1947 being more beneficial to the workman, would prevail. Moreover, there being no such provision in the Act of 1947 to stay the proceedings, the proceedings could not be stayed. The learned labour court also referred to Section 36B in support of its reasonings, which empower the appropriate Government to exempt conditionally or unconditionally any such establishment or undertaking or a class of establishments or undertakings from all or any of the provisions of the Act of 1947 by publishing notification in the official Gazette in that behalf. The learned labour court held that the notifications issued by the 16 Government under Section 3 of the Act of 1961 cannot be considered as one issued under Section 36B of the Act of 1947 and therefore, the proceedings before the learned labour court cannot be stayed. The kind of cases that were pending before the learned labour court can be broadly divided into two categories; one category pertains to those reference cases wherein industrial disputes under Section 10 of the Act of 1947 have been referred to the learned labour court for adjudication whereas other category of cases are those where applications under Section 33C(2) have been filed for computation for any monetary benefit, which the workmen claim are due to be paid to them by the management. Presently, I shall take up the second category first for deciding these writ petitions. In passing the impugned order, the learned labour court has referred to the judgment of the Uttaranchal High Court in the case of Uptron India Ltd. Vs. Presiding Officer, Labour Court, Dehradun & Anr. reported in 2004-II-LLJ 378 and the 17 judgment of Calcutta High Court in Bengal Immunity Limited Vs. Mukul Kumar Kar & Ors reported in 2004-II LLJ 381 wherein it was held that bar contained in Section 22 of the Sick Industrial Companies (Special Provisions) Act, 1985 as to maintainability of a claim before a court of law would not apply for recovery of the due payment of salary, leave enachment and gratuity to the workman. This issue should not detain me further because the Government itself in the notifications issued under Section 3 of the Act of 1961 from time to time excepted this category of the cases from the purview of bar contained in Section 4 of the said Act. A Division Bench of this court in The State of Rajasthan & Anr. Vs. Jaipur Metals and Electrical Mazdoors Sangh & ors. reported in 2003 WLC (Raj.)(UC) 591 while dealing with the same objection with regard to maintainability of claim for payment of outstanding wages on account of bar contained in Section 22 of the Sick Industrial Companies (Special Provisions) Act, 1995 held in para no.20 of the judgment that simply because a company is declared as sick industry, the relief of due wages cannot be denied to its workers and there is no bar against the 18 enforcement of the claims of wages of such workmen. It was held that status of an sick industrial company to be a sick company cannot come in the way and there is no embargo or any legal impediment against the enforcement of the claim of the wages of the workmen. In view of the categorical stipulation contained in the notifications under Section 3 of the Act of 1961 issued by the Government and on the basis of pronouncement by the Division Bench of this Court, the applications filed by the workmen before the learned labour court under Section 33C(2) can be 'instituted or, commenced, if, pending, shall be proceeded with' notwithstanding the petitioner – federation having been declared as relief undertaking. The impugned order passed by the learned labour court in so far as it refuses to stay the proceedings under Section 33C(2) of the Act relating to payment of unpaid wages to the workman is therefore perfectly justified in law. This now takes me to the first category of cases where 19 the proceedings pending before the learned labour court pertain to those cases wherein reference on industrial disputes was made by the appropriate Government under Section 10 of the Act of 1947 for adjudication by it. Basically three reasonings have been given by the learned labour court in support of its order. First reason that has been assigned is that the Act of 1947 being a Central enactment and labour welfare legislation, it requires expeditious adjudication of the disputes and there being no provision of stay of proceedings under the Act of 1947, the provisions contained in the Act of 1961 cannot effect the proceedings before the learned labour court. A somewhat similar controversy cropped up before this Court in M/s. Jaysynth Dyechem (supra) wherein the validity of the Act of 1961 and the notification issued by the State Government under Sections 3 and 4 of the said Act was challenged by creditors of a company registered under the Indian Companies Act, 1956. An argument was raised that the matters relating to winding up of a company falls exclusively in Entry 43 of List I (Union List) of Schedule VII to the 20 Constitution and the Indian Companies Act having been enacted by the parliament providing for winding of companies along with their incorporation and regulation, no law affecting winding up can be enacted by State legislature. If any provision affects the winding of company, then making of such a provision would attract entry 43 (supra) within the exclusive domain of the Parliament and if any law is enacted by the State Legislature in any way, touching upon the winding up of any company, then such a law would be beyond the competence of the State legislature. In that case too, winding up proceedings pending before the company judge of this Court were stayed by virtue of provisions contained in Section 4(1)(b) of the Act of 1961 following the notification issued by the State Government under Section 3 of the said Act. This court on consideration the entire matter held as under: - “that if any law made by the State Government touches the domain of the Central Legislature or any law made by the Central Legislature touches the domain of the State Legislature then in that situation, the court is called upon to look to the substance of the law and determine the question as to whether the enacted law as such falls in which entry and the doctrine of pith end substance would 21 come into play and having regard to this doctrine, the controversy has to be resolved. It is true that by section 4(1)(b) pending winding up proceeding are affected. If this provision applies then the pending proceeding shall stand stayed and, new proceedings shall not be instituted or commenced and to that extent, it can be said that the provisions touches the winding up of companies falling within entry 43. The question is what is the true character of the Act. What is intended by the Act. For determination of the true character and the nature of the legislation, one should look to the whole of the Act including its preamble and as well as its objects and reasons. A perusal of the objects and reasons and the preamble would show that the Act has been enacted with a view to provide relief to certain undertakings which are on the verge of collapse which may result into un-employment and which may also result into nonproduction of the commodities for the manufacturer, of which they came into existence. In case, the companies or the undertakings are allowed to be wound up then in that situation there would be unemployment and the products which may be essential for the society would be deprived of those products. The State Government had come forward to provide relief to such undertakings. It may advance loan or provide other financial assistance or give any guarantees and thereby save those undertakings, for the time being and this can be done by issuance of the notification u/sec. 3 and the aggregate period under sub-sec. (2) of Sec.3 is 5 years. Sec.4 further provides for specifying the industrial relations and other facilities temporarily for relief undertakings. The application of certain laws may be stayed and even application of certain agreements, settlements and awards or standing orders any also be stayed or suspended. When laws can be suspended, when awards can be suspended and when standing orders can be stayed then u/sec.4(1)(b) it was 22 necessary to make a provision for staying pending or bar the institution or commencement of any suit or other proceeding. Viewed the light of the preamble and the statement of Objects and Reasons along with provisions of the Act, it would appear that the legislation was intended to prevent unemployment and the legislation was also intended to continue the industry or undertkaing to run so as to continue to manufacture the products by such industrial undertakings, the control of which has been declared by Parliament