THE HON'BLE SRI JUSTICE RAMESH RANGANATHAN WRIT PETITION NOS.7867 AND 12691 OF 2000 Dated 12th August, 2010 WRIT PETITION NO.7867 OF 2000 United India Insurance Company Limited …Petitioner And T.V.Ramana and another …Respondents WRIT PETITION NO.12691 OF 2000 T.V.Ramana …Petitioner And Labour Court, Guntur and another …Respondents The Court made the following COMMON ORDER: Both the United India Insurance Company Limited, and the employee concerned, have filed Writ Petition Nos.7867 of 2000 and 12691 of 2000 respectively questioning the judgment passed by the Labour Court, Guntur in Second Appeal No.3 of 1987 dated 15.02.2000. For convenience, the parties herein shall be referred to as they are arrayed in Writ Petition No.7867 of 2000. The first respondent-employee invoked the jurisdiction of the Authority, under Section 41 of the Andhra Pradesh Shops and Establishments Act, 1966 (hereinafter referred to as “the 1966 Act”), in Appeal No.A/APSEF.30/79, seeking to set aside the order passed by the petitioner herein, on 26.09.1979 terminating his services as illegal, unjustified, void and of no legal effect. The Authority, by its order dated 15.01.1986, directed the petitioner herein to pay the first respondent- employee compensation of Rs.20,000/- in lieu of reinstatement. While the petitioner herein chose not to question the validity of the said order, the first respondent filed Second Appeal No.3 of 1987 and the Labour Court, by order dated 15.02.2000, awarded compensation of Rs.1,00,000/- to the first respondent herein in lieu of reinstatement, and directed the petitioner to pay the said compensation within two months. Aggrieved thereby, both the first respondent and the petitioner have approached this Court. Sri A.Ramalingeswara Rao, learned counsel for the petitioner, would question the validity of the order of the Labour Court on the following three grounds. (1) Since the first respondent had admitted his guilt, as evidenced by respondents 4 and 5, it was wholly unnecessary for an enquiry to be conducted and on the basis of the admission, a valid order of termination could be passed; (2) the petitioner-Company is an exempted establishment under Section 64 of the 1966 Act and, as such, neither the original authority nor the Labour Court had the jurisdiction to decide the claim for reinstatement and back wages; (3) the proper principle for determining compensation in lieu of reinstatement has not been applied and, while payment of 3.33 years of loss of salary last drawn by the first respondent-employee could be made the basis for payment of compensation, the Labour Court had awarded compensation far higher than what was required to be paid in accordance with the said principle. Learned counsel would rely on K.Venkateswarlu v. Nagarjuna Grameena Bank represented by its Chairman, Khammam and another[1]; C.V.Raman v. Management of Bank of India and another[2]; and O.P.Bhandari v. Indian Tourism Development Corporation Limited[3]. With regards the contention that admission of guilt by the employee absolved the Employer of the requirement of holding an enquiry, it must be noted that the original authority had rejected such a contention, and inasmuch as, the petitioner herein chose not to prefer an appeal thereagainst, I find no justification in now examining the question as to whether the first respondent had, in fact, voluntarily admitted his guilt, and whether such an admission, if any, absolved the petitioner of the requirement of holding a departmental enquiry. The first contention urged on behalf of the petitioner, therefore, necessitates rejection. With regards the second contention of the petitioner establishment being exempted under Section 64 of the 1966 Act, it is necessary to note that, under Section 64(1) (b) of the 1966 Act, nothing in the Act would apply to an establishment under the Central Government. In C.V.Raman, the Supreme Court held that the test of deep and pervasive State control, if satisfied, would bring an establishment under the Central Government. The question which the original authority and the Labour Court were required to examine was whether the various provisions of the General Insurance Business (Nationalisation) Act, 1972 (hereinafter referred to as “the 1972 Act”), and the Scheme made thereunder, would show that the Central Government exercised deep and pervasive control over the petitioner establishment. Neither the original authority nor the Labour Court have taken note of let alone examine the various provisions of the 1972 Act, and the scheme made thereunder. Sri P.Venkateswarlu, learned counsel appearing on behalf of the first respondent, would contend that, inasmuch as the petitioner herein had not chosen to prefer an appeal against the order of the original authority, the Labour Court was justified in holding that the question, whether or not the petitioner was an exempted establishment, would not be gone into an appeal preferred by the first respondent-employee. I must express my inability to agree. The question whether or not the petitioner was an exempted establishment would go to the very root of the jurisdiction of the authorities, under the 1966 Act, to hear and decide the claim of the first respondent for reinstatement and back wages. The question of inherent lack of jurisdiction can be raised even in collateral proceedings (Sunil Kumar Mehta v. Gobind Ram Bohra[4]). Even though the petitioner did not prefer an appeal against the order of the original authority, even in collateral proceedings, it was entitled to sustain the order of the original authority on the ground of inherent lack of jurisdiction. If the Labour Court were to agree with the petitioner that it lacked jurisdiction to hear and adjudicate the claim of the first respondent-employee, while the first respondent-employee would nonetheless be entitled to the compensation awarded by the original authority of Rs.20,000/- as the petitioner has not chosen to prefer an appeal there against, the Labour Court would not be entitled to enhance the compensation in the Second Appeal preferred before it by the first respondent. The Labour Court, therefore, ought to have examined the petitioner’s claim of it being an exempted establishment under Section 64 of the 1966 Act in the light of the various statutory provisions of the 1972 Act, the Scheme made thereunder and the memorandum and articles of association, if any, governing the petitioner establishment, and then adjudicated the question whether or not the petitioner was an exempted establishment. Since the Labour Court, in its judgment in Second Appeal No.3 of 1987, has not examined this question, it is but appropriate that the said order is set aside, and the matter is remanded back to the Labour Court for its consideration afresh in accordance with law. Inasmuch as the matter is being remanded back to the Labour Court, I also leave the question with regards the appropriate compensation to be paid to the respondent employee in lieu of reinstatement open for adjudication by the Labour Court. One question, which, however, necessitates examination is the contention urged by Sri P.Venkateswarlu, learned counsel for the first respondent-employee, that the first respondent’s plight, of running from one Court/Tribunal to the other, for the past 3 ½ decades, more so as he was acquitted of a similar charge by the Criminal Court which order was confirmed in appeal by the High Court and the Supreme Court, would necessitate a sympathetic view being taken by this Court, and for the judgment of the Labour Court to be confirmed. While the services of the first respondent were terminated in September, 1979, it is indeed unfortunate that, for the past more than 3 decades, he is being made to run from pillar to post in his quest for reinstatement with back wages. The matter was pending before the original authority for seven years; before the Labour Court for the next thirteen years, and later before this Court for a decade. While the inordinate delay in the judicial process is no doubt a cause of concern, this Court must not lose sight of the fact that any sympathy which it could show can only be in accordance with law and, since the question of lack of jurisdiction of the Labour Court would go to the very root of the dispute relating to the termination of services of an employee of the petitioner, which claims to be an exempted establishment, the only order, which can be passed is for the Labour Court to decide the matter at the earliest and, in any event, not later than four months from the date of receipt of a copy of this order. Pursuant to the interim order passed by this Court, the petitioner has deposited Rs.50,000/- before the Labour Court and the first respondent-employee has been permitted to withdraw Rs.25,000/-. I consider it appropriate, therefore, to direct that the said interim order shall continue to remain in force till the Labour Court passes an order afresh, and in accordance with law. Both the writ petitions are accordingly disposed of. No costs. __________________________ Ramesh Ranganathan, J Dated 12th August, 2010 vrn [1] 1995 (1) ALT 511 [2] AIR 1988 SC 1369 [3] AIR 1987 SC 111 (1) [4] 1990 (1) SCC 193