IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED: 04.02.2005 CORAM: THE HONOURABLE MR.JUSTICE K.P.SIVASUBRAMANIAM W.P.Nos.5395 of 1996 and 3145 of 1997 W.P.No.5395 of 1996: Chemplast Sanmar Limited (previously known as Chemicals and Plastics India Ltd.) Mettur Dam Salem District. .. Petitioner versus 1. The Presiding Officer Labour Court Salem. 2. Allimuthu 3. R.Samiappan 4. G.Jaypal 5. Chellamuthu 6. V.Natarajan 7. N.Rajalingam 8. Marimuthu 9. K.Srinivasan 10. K.Palanilappan 11. C.Palaniappan 12. A.M.Purushothaman 13. V.Chellan 14. K.Marimuthu 15. Antony Guruz 16. S.John 17. N.Sengodan 18. R.Kumarasamy 19. Chinnathambi 20. S.Thangavelu 21. V.Manickam 22. G.Rangan 23. L.Appusamy 24. I.Manickam 25. S.Srirangan 26. Mathappan 27. C.Muthumanickam https://hcservices.ecourts.gov.in/hcservices/ 28. Palaniappan 29. Kaveri 30. Palaniappan 31. V.Alagappan 32. Santhappan 33. K.Natarajan 34. K.Seviappan 35. Palani 36. Duraisamy 37. Ammasi 38. S.Srinivasan 39. M.Thangavelu 40. S.Iyyankutti 41. K.Ponnappan 42. C.Mathes 43. S.Thangavelu 44. Mohamad Ghouse 45. S.Ramasamy 46. Chinnappan 47. P.Pongiannan 48. Chinnamuthu 49. P.Muniyan 50. Chinnusamy 51. R.Karuppusamy 52. R.Santhanam 53. P.Mathappan 54. P.Kutty Goundan 55. Yesudoss 56. P.Ramasamy 57. K.Chinnaponnu 58. P.Chidambaram 59. Goundappan 60. P.Ramadurai 61. Anantharaman 62. S.P.Govindan 63. K.Natesan 64. Mamoosa 65. Ayyadurai 66. O.P.Shanmugam 67. Kandan 68. R.Krishnan 69. G.Kannappan 70. Chinnapaiyan 71. V.Marimuthu 72. A.Angappan 73. S.Thangavelu 74. P.Kandasamy 75. K.Muthu 76. G.Mani 77. R.Srinivasaraghavan https://hcservices.ecourts.gov.in/hcservices/ 78. S.Kali 79. I.Chinnappan 80. A.Mathilairaj 81. Pavayee 82. Christinamary 83. Chinnaponnu .. Respondents Respondent Nos.81 to 83 have been impleaded as party respondents by order of Court dated 7.2.2004 in W.P.M.P.Nos. 1856 to 1858 of 2004. W.P.No.3145 of 1997: Chemplast Sanmar Limited (previously known as Chemicals and Plastics India Ltd.) Mettur Dam. .. Petitioner versus 1. The Presiding Officer Labour Court Salem-1. 2. K.Angappan 3. N.Perumal 4. K.Sengodan 5. P.Arusamy 6. T.S.Srinivasamoorthy 7. K.Anai Gounder 8. S.Basha 9. P.Perumal 10. V.Ramasamy 11. P.Marimuthu 12. S.Thangavelu 13. P.Perumal 14. K.Kaliappan 15. P.Balasubramaniam 16. C.Chinnannan 17. K.Jayaraman 18. A.Hansar Basha 19. N.Ramachandran 20. K.Sri Rangan 21. N.Arunachalam 22. R.Kalyanasundaram 23. A.Pachiappan (deceased) https://hcservices.ecourts.gov.in/hcservices/ 24. C.Alagappan 25. M.Marimuthu 26. V.Chinnaraman 27. S.P.Rathinam 28. A.Kandan 29. N.Doraisamy 30. V.Madhusamy 31. K.Subramanian 32. P.Chinnapaiyan 33. M.Madhappan 34. R.Velayudham (deceased) 35. K.G.Mahadevan 36. D.Srinivasan 37. P.Palaniammal 38. P.Krishnamoorthy 39. P.Murugan 40. P.Raja 41. P.Maheswari 42. V.Govindammal 43. V.Murugesan 44. T.Kandammal 45. V.Govindan 46. V.Kandasamy .. Respondents Respondents-40 and 41 are represented by natural guardian and mother. Respondents 37 to 41 are substituted as legal representatives of the deceased 23rd respondent as per the order of Court dated 24.1.1998 in W.M.P.No.29244 of 1997. Respondents-42 to 46 are substituted as legal representatives of the deceased 34th respondent as per order of Court dated 24.1.1998 in W.M.P.No. 29245 of 1997. ----- PRAYER: W.P.No.5395 of 1996 is filed under Article 226 of the Constitution of India for the issue of a writ of Certiorari to call for the records connected with the common order made by the first respondent on C.P.Nos.106 to 184 of 1995 and to quash the said order dated 18.3.1996. https://hcservices.ecourts.gov.in/hcservices/ W.P.No.3147 of 1997 is filed under Article 226 of the Constitution of India for the issue of a writ of Certiorari to call for the records connected with the common order made by the first respondent in C.P.Nos.130 to 160 of 1996 and C.P.Nos.192 to 195 of 1996 and to quash the said order dated 6.1.1997. ----- For petitioner in both W.Ps. : Mr.A.L.Somayaji Senior Advocate for Mr.S.Ravindran, for M/s.T.S.Gopalan & Co. For respondents-2 to 12 and 14 to 80 in W.P.No.5395 of 1996 and respondents-2 to 33 and 35 to 46 in W.P.No.3145 of 1997 : Mr.N.G.R.Prasad for M/s.Row & Reddy ORDER In W.P.No.5395 of 1996, M/s.Chemplast Sanmar Limited seeks for quashing the common order of the Presiding Officer, Labour Court, Salem, in a batch of Claim Petitions, dated 18.3.1996. 2. In W.P.No.3147 of 1997, another common order of the labour Court dated 6.1.1997 in a further batch of claim petitions is questioned. 3. As the issues which arise for consideration are common and identical, they are heard together. 4. The pleadings and factual circumstances which led to each of the individuals filing the respective claim petitions before the Labour Court are common. Though the dates of each one of them leaving the services of the Management may vary, such variation does not have any impact on the legal issue which arises for consideration in these two writ petitions. Hence, for convenience, the pleadings in C.P.No.106 of 1995 filed by one Allimuthu/claimant, are extracted below. 5. The claimant has contended that he was employed under the Management in their factory/Office and Mettur Dam. Service conditions of all the workers were governed by the Standing Orders of the Company and the Settlement signed between themselves. The previous Settlement dated 7.7.1990 expired on 31.3.1994. The Unions, which included the petitioner, placed a charter of demands in April, 1994. However, the Management was protracting the https://hcservices.ecourts.gov.in/hcservices/ negotiations, as a result of which, new Settlement could not be reached between the Management and the Workmen. A new Settlement was signed only on 6.2.1995. 6. The claimant further contended that in the meantime, the Management, by their notice dated 10.7.1994, introduced a Voluntary Retirement Scheme to tackle the problem of large work force not being in consonance with the actual requirements. The claimant states that he submitted his application in terms of the Voluntary Retirement Scheme (V.R.S.) in July, 1994. The Management accepted the application and the claimant was superannuated from service with effect from 1.8.1994. 7. The negotiation which was continuing between the Management and the Workmen culminated in a Settlement dated 6.2.1995, providing for revision of wages and other benefits for the Workmen. In terms of the Settlement, the arrears payable under the Settlement will be paid on or before 18.2.1995, including the Workmen who have retired on superannuation or died while in service between 1.4.1994 and 6.2.1995. The claimant contended that he was retired not on account of reaching the superannuation at 58 years, but on account of superannuation under V.R.S. After seeing the terms of the Settlement dated 6.2.1995, some of the workers who were superannuated on V.R.S., had requested the Management for the payment of arrears which they would have received on the basis of the revised wages, in terms of the Settlement. A meeting of similarly placed Workmen was held during the third week of March, 1995. The delegates met the Vice President of the Company and repeated their grievances. They were informed that the Management had rejected their request, whereupon, the petitioners have decided to file Computation Petitions. 8. The claimant further contended before the labour Court, that in the course of negotiations, the Management had expressed that the benefit of the Settlement dated 6.2.1995, would be given only to those Workmen who retired on reaching the age of superannuation, namely, 58 years and not for Workmen like the petitioners, who had retired under V.R.S. However, according to the petitioners, a reading of the Settlement would disclose that it was not restricted to only those who retired on regular superannuation. 9. In the counter statement filed by the Management, the Company stated that the petitioner had tendered his resignation by his letter dated 15.7.1994. His resignation was accepted on 31.7.1994. Hence, after the date of acceptance of resignation, the relationship of employer and employee had come to an end and hence, the petitioner cannot claim to be an employee after 31.7.1994. The relationship of employer and employee had been put https://hcservices.ecourts.gov.in/hcservices/ an end to. 10. The Management further contended that in terms of the V.R.S., the Company had formulated its own Special Gratuity Scheme, by which, the employees were entitled to certain benefits of lumpsum payment, based on their past service, as special gratuity. The said grant was solely for the benefit of the former employees. The first instalment was paid on 16.8.1994 and the second and third instalments would be payable in future as per the option of the petitioner. The petitioner having resigned from the job, he was paid with the amount due under the V.R.S. 11. As regards the charter of demands, it is only after prolonged discussions, the Management and the workers, as on the date of 6.2.1995, agreed and entered into a Settlement under Section 18(1) of the Industrial Disputes Act. In terms of the Settlement, revised scale of pay and certain other benefits were also granted. It was made clear in paragraph 1 of the Settlement itself that the terms and conditions shall apply only to permanent employees on the rolls of the Company as on the date of signing the Settlement, namely, 6.2.1995. Clauses 36 and 37 of the Settlement also relate to the payment of arrears of the period of operation of the Settlement. Therefore, the Settlement was not at all applicable to the petitioner. 12. The Management further contended that a petition under Section 33-C(2) was purely in the nature of an execution petition and unless and otherwise the claim was based on any award, Settlement or statute, the claim petition will not be maintainable. Therefore, the impugned claim petitions under Section 33-C(2) cannot be maintained. The Management further contended that the Settlement executed under Section 18(1) dated 6.2.1995 would cover only the permanent employees who were on the rolls as on the said date. The petitioner cannot claim to be an employee who had retired from service on superannuation. They had resigned from their respective posts and hence, cannot claim to have been superannuated from service. Therefore, the claim based on an assumption as if the petitioners are superannuated from service cannot be sustained. Clause 36 of the agreement clearly provides that only persons who have retired on superannuation are eligible for arrears and hence cannot be relied upon by persons who have resigned or opted for V.R.S. 13. A detailed reply statement was also filed on behalf of the claimant, disputing the various contentions raised by the Management in their counter affidavit. The petitioner had reiterated that he had not resigned from the post, but had only retired under the V.R.S. Retirement on V.R.S. was also retirement on superannuation. The Management cannot contend that the petitioner had resigned from service. The petitioner opted to go https://hcservices.ecourts.gov.in/hcservices/ on V.R.S. only by virtue of the notice of the Management dated 10.7.1994, but for which, the claimant would have continued in service till he reached the age of retirement, as fixed under the Standing Orders. The claimant also stated that the financial position of the Company was sound and that the Management was one of the blue-chip companies with a profit of more than Rs.20 crores annually. The petitioner and others like himself were told by the Management that compensation would be revised on the basis of the Settlement to be signed subsequently, namely, Settlement dated 6.2.1995. It was unfortunate that the respondent should now go back on their words and raise untenable objections. 14. The Labour Court, on consideration of the pleadings and the evidence, concluded that the case of the claimants cannot be treated as resignation, but only as on superannuation under Voluntary Retirement Scheme and therefore, they would be entitled for the benefit of Voluntary Retirement Scheme as well as the agreement under Section 18(1) of the Industrial Disputes Act. The Labour Court also held that having regard to the facts and circumstances that they had voluntarily left the services only on being informed about the benefits of the V.R.S., on grounds of equity and justice also, they would be entitled to the benefits they had claimed. Consequently, the claim petitions were allowed, awarding specific amounts due for each worker/claimant, after deducting the amounts already received by them. 15. Mr.A.L.Somayaji, learned senior counsel representing the petitioner/Management, contended that the claim petitions under Section 33-C(2) were totally misconceived. The claim was not based on any prior award or decision declaring the rights of the employees to receive the benefits which they had claimed or any settlement between the parties. On the contrary, the basis of the claim was very much disputed and objected to by the Management and hence, the labour Court ought not to have entertained the claim petitions. A perusal of the impugned order itself would disclose that the labour Court had allowed the claims only on the basis of its conclusion that the claimants deserve to be paid on grounds of equity and justice. Such considerations were irrelevant in a petition under Section 33-C(2) and the only question which ought to have been considered by the labour Court is whether the claimants are entitled to any relief as a legal right. Learned senior counsel also took me through the V.R.S. notice dated 10.7.1994 and the settlement dated 6.2.1995 under Section 18 of the Industrial Disputes Act and contended that the specific clauses thereunder are explicit that the benefits of the agreement cannot be claimed by the claimants who had resigned from the post. They did not retire in the regular course of their service conditions or by superannuation and their exit cannot be treated as superannuation as the labour Court had wrongly interpreted. In fact, the wage revision was contemplated only for the benefit of https://hcservices.ecourts.gov.in/hcservices/ the workers having agreed to maintain the optimum production and hence, the benefit would not have been contemplated for employees who had opted to resign. The terms of the settlement were also very clear and intended only to favour the workers who were on the rolls as on the date of execution of the settlement, namely, 6.2.1995, vide Clause No.1. The finding of the labour Court that Clause No.1 of the settlement specifying that it would apply only to those permanent workmen on the rolls as on that day was given a go bye and was not given effect to, was not based on any evidence. Such inferences are contrary to the actual terms of the written agreement and therefore, they are neither correct nor warranted. There was also no intention to include the workers, who had gone on V.R.S. 16. Learned senior counsel also contended that there was clear distinction between Voluntary Retirement and regular retirement on superannuation. The settlement was not intended to benefit the employees who had left on their own under the Voluntary Retirement Scheme. Under Section 2(oo) of the Industrial Disputes Act, "Voluntary retirement" and "retirement on superannuation" are classified differently. Under Clause 36 of the agreement, it was made clear that the benefits of the agreement were to be made available only to those who "retire on superannuation." 17. Learned senior counsel further contended that the pleadings of both sides were very clear that there were disputed questions of fact and the claim was not based on any award or any explicit agreement between the parties and hence, the claim petition under Section 33-C(2) was not at all maintainable. 18. Reliance was placed on various rulings in support of the above contentions, which will be dealt with later. 19. Mr.N.G.R.Prasad, appearing for the claimants, refers to the circumstances under which the Voluntary Retirement Scheme was introduced. The earlier settlement having lapsed, there was negotiation between the Management and the Workers. It is only in those circumstances, initiation came from the Management for Voluntary Retirement Scheme and the letters of the employees themselves would show that they did not resign from the post, but were leaving under Voluntary Retirement Scheme. The workers were made to understand that they would be entitled to the benefits of Voluntary Retirement Scheme. Learned counsel further contended that the Voluntary Retirement Scheme was not based on the wage structure as on 31.3.1994, but only as on 1.4.1994. The formula under Voluntary Retirement Scheme was only on the basis of salary as on 1.4.1994. The workers had opted for Voluntary Retirement Scheme only on the understanding that the benefits will be fixed on the basis of the revised pay scale to be fixed after https://hcservices.ecourts.gov.in/hcservices/ the negotiations. A perusal of the letters of the employees will show that they opted to leave the service only on the basis of the Voluntary Retirement Scheme offered by the Management. It was, therefore, open to the Labour Court to see under what circumstances the employees opted to leave the service and to interpret the facts available on record, which was permissible under Section 33-C(2) of the Industrial Disputes Act. The only fact that a counter affidavit is filed by the Management denying the just claims of the workers cannot result in rendering the claim petition unsustainable and that the workers should be driven to raise a dispute. It is unfair on the part of the Management to have induced the workers to leave the service on a representation that they will receive the benefits of the Voluntary Retirement Scheme and the settlement to be arrived at, and thereafter, to deny the said benefits. 20. Clause 36 of the settlement clearly indicates that the benefits thereunder shall apply to all employees who retired on superannuation or died while in service between 1.4.1994 till the date of settlement, namely, 6.2.1994. Therefore, the retrospective effect of the settlement was very clear on the basis of the settlement itself. The expression "superannuation" would include the cases of the claimants also. Superannuation cannot mean only retirement on attaining of the age of retirement, but also include the cases of V.R.S. The various rulings relied on by Mr.N.G.R.Prasad will also be dealt with subsequently. 21. In reply, Mr.Somayaji, learned senior counsel, contended that the claimants knew what was their salary as on 1.4.1994. Voluntary Retirement Scheme was introduced only on 10.4.1994. The claim petition proceeds only on the basis of the settlement and not as contended by the claimants. While interpreting the settlement, which came into picture only on a later date, no new rights can be claimed in a petition under Section 33-C(2). The award has been granted only on the interpretation adopted by the labour Court on its own notions of equity and interest of justice and not on the basis of the alleged rights of parties or under the settlement, which was not permissible under Section 33-C(2). 22. I have considered the submissions of both sides. The issue of maintainability may be taken up at the end of the discussion of the other issues, which would throw a better light on the background in which the employees had filed the claim petition under Section 33-C(2). 23. There is no dispute over the fact that all the claimants left the service only pursuant to the Voluntary Retirement Scheme. Though in the claim petition as well as before this Court, there was an attempt by the Management to term the claimants leaving the service as on "resignation", it is clearly admitted in the writ https://hcservices.ecourts.gov.in/hcservices/ petition itself (paragraph 5 of the affidavit) that the claimants had voluntarily retired as per the scheme of July, 1994. Apart from this clear admission, a perusal of the letter of the claimant also clearly discloses the circumstances under which he left the service. Identically worded letters were sent by all the claimants and also the letter of acceptance by the Management. The following is the letter sent by the claimants: @ j';fsJ 10/7/94 njjpa gp & v- bek;gh; nehl;O!; gpufhuk; fk;bgdpapdhy; mwptpf;fg;gl;Ls;s jhdhf ntiyia tpl;L eP';Fk; jpl;lj;ij (V.R.S.) Vw;Wf;bfhz;L vd; brhe;j FLk;g fhuz';fSf;fhf vd;Dila ntiyia uh$pdhkh bra;fpnwd;/ vd;Dila ,e;j uh$pdhkhit Vw;Wf;bfhz;L nkw;go j';fs; nehl;Orpy; Fwpg;gpl;Ls;sgo vdf;F fpilf;f ntz;oa TLjy; bjhifiaa[k; nrh;j;J mspj;J vdJ fzf;Ffis Koj;Jf; bfhLf;Fk;go nfl;Lf; bfhs;fpnwd;/ 2) nkw;go jpl;lj;jpd; fPH; ehd; ntiyia tpl;L tpyFk; nghJ vdf;F fk;bgdp tPL bfhLj;j nghJ vGjpf;bfhLj;j th;j;jkhdj;jpy; cs;s c&uj;J-2d;go ehd; hpyPt; bra;ag;gl;l njjpapypUe;J xUkhj fhyj;jpw;Fs; tPl;il fhyp bra;J tpLtjhft[k; cWjp Twfpnwd;/ 3) vdJ gp/vg;/ ehkpdpiana nkw;go nehl;Orpd; gj;jpd;go ehkpdpahft[k; ,Uf;f rk;kjpf;fpnwd;/@ 24. In response to the said letter, the Management had forwarded their acceptance as follows: @ 10/7/94 njjpa gp & v-9249 be/ fk;bgdp nehl;Orpd; gpufhuk; mwptpf;fg;gl;l jpl;lj;jpd; fPH; nkw;go ckJ tpz;zg;gj;jpd;go ePh; bfhLj;jpUf;Fk; uh$pdhkhit eph;thfk; ghprPypj;J mij Vw;Wf;bfhs;tbjd jPh;khdpj;jpUf;fpwJ/ ePh; ekJ rh;tPrpypUe;J njjp ,Wjpa[ld; ntiyapypUe;J Xa;t[ bgWfpwPh;/ @ 25. Therefore, two indisputable fact situations emerge, namely, that the claimants had left the service only on voluntary retirement and not by resignation simpliciter, as sought to be contended by the Management. It is also clear that the claimants went on voluntary retirement during the month of July, 1994 after 10.7.1994, being the date of the scheme. The reason why the Management was harping on the expression "resignation" is an attempt on their part to raise a legal contention that the act of the claimants having left the services by resignation cannot amount to superannuation and that therefore, the claimants were not entitled to the settlement dated 6.2.1995. https://hcservices.ecourts.gov.in/hcservices/ 26. Though the benefits of the Voluntary Retirement Scheme had been disbursed to the claimants, the claims of the employees pertain to the terms of the Long-term Wage Settlement dated 6.2.1995. The question which, therefore, arises for consideration is whether the subsequent settlement is retrospective, and even if it be retrospective, whether it would apply to the employees who have gone out of service on voluntary retirement. 27. On the question whether the settlement dated 6.2.1995 is retrospective or not, it is necessary to extract Clause 36 of the settlement, which is the crucial provision relevant to consider both the above issues: "36. Arrears payable under this settlement will be paid on or before 18th February 1995, (including to these permanent workmen who have retired on superannuation or died while in service between 01.04.94 and the date of signing this settlement) income tax deductions will be made from the arrears arising out of this settlement. " 28. Clause 36 clearly spells out that it applies to all workmen who were in service as on 1.4.1994 and after, subject, of course, to two conditions, namely, that they should have retired on superannuation or died while in service between 1.4.1994 and 6.2.1995. If so, it follows that the settlement is retrospective from 1.4.1994. It is true that Clause 1 mentions that the conditions of settlement shall apply only to those workmen on the rolls of the company as on the date of signing the settlement. There is an obvious conflict between the two provisions. Therefore, the effect of both the provisions have to be harmoniously interpreted as far as possible. Clause 36 deals with a specific issue of applying the benefits to the employees who were working from 1.4.1994. Hence, to the extent Clause 1 is inconsistent, Clause 1 has to be ignored. In fact, the Management, faced with the clear language under Clause 36, did not press its contention that the settlement should apply only to the employees who were actual parties and who had signed the agreement. Such a contention cannot be sustained, having regard to the clear terms of Clause 36. I am, therefore, inclined to hold that the settlement is retrospective and would apply also to employees who are not actual signatories to the settlement, subject to the limitations contained in Clause 36. The next issue is more appropriate as to whether the retrospective effect of Clause 36 would extend to the claimants also, who had been working after 1.4.1994. Rival submissions have been made on the effect of the expression "retire on superannuation" and whether it would include voluntary retirement also. https://hcservices.ecourts.gov.in/hcservices/ 29. While the Management contends that voluntary retirement is not superannuation, the contention on behalf of the claimants is that voluntary retirement and retirement on attainment of age of superannuation are one and the same. I am inclined to agree with the contention on behalf of the claimants for the following reasons. 30. In I.T.I. LTD. Vs. I.T.I. Ex/VR EMPLOYEES AND OTHERS (2002-II-LLJ 1101), a Division Bench of the Karnataka High Court had to deal with a case in which the employees on voluntary retirement who were entitled to one and half months' pay on the date of voluntary retirement, claimed the benefits of subsequent revision of pay scale with effect from a date prior to such retirement. The Division Bench held that inasmuch as the pay was revised with retrospective effect, it is made applicable to the retired employees also and such benefit would be available to the