WP(C) 2259/2008 BEFORE THE HON’BLE MR. JUSTICE B.K. SHARMA JUDGEMENT AND ORDER 1. The writ petition is directed against the particular reference made by t he Govt. of Assam in the Labour and Employment Department and the proceedings th ereof. The reference is as to whether the petitioner No. 1 is justified in not taking back the workmen and staff in question from the earlier composite Tea Es tate which was later on bifurcated and divided into two Tea Estates- one represe nted by the petitioners and the other represented by the respondent No. 4. Background facts 2. The petitioner No. 1 is a company incorporated under the Companies Act, 1956 having its registered office at Borgang Tea Estate in the District of Sonit pur, Assam and the petitioner No. 2 is one of the Directors of the said Company. 3. The erstwhile composite Tea Estate, namely M/s. Kettela Tea Company Pvt. Ltd. (hereinafter referred to as KTCPL), was incorporated on and about 30.10.69 . The KTCPL was the owner of the Kettela Tea Estate which had two divisions, nam ely Kettala Division and Borgang Division both situated in the District of Sonit pur. Both the Divisions had separate labour and staff strength with separate wag e register, provident fund register etc. In other words, they were two separate and distinct Tea Estates owned by KTCPL. 4. In the year 1994 some disputes arose between the two groups of family me mbers in managing the affairs of KTCPL and consequently an application was filed by one group before the Company Law Board under Sections 397, 398, 399, 402, 40 3, 406 and 409 of the Company Act alleging mismanagement of the Company. The sai d application was registered and numbered as CP No. 70/96. The Company Law Board by its order dated 10.01.97 issued direction that both the groups should bid fo r the shares of the Company and whichever offers the highest bid, shall take the control of the Company. 5. The aforesaid order dated 10.01.97 was put to challenge before this Cour t in OJ (Company Appeal) No. 42/97. Two other appeals being OJ (Company Appeal) Nos. 44/97 and 45/97 were also filed by other group. All the appeals were heard by this Court and by judgment and order dated 18.03.98 dismissed the appeals p referred by both the groups. Direction was issued to both the groups to submit t heir respective bid in sealed cover as per the direction of the Company Law Boar d. 6. After the aforesaid developments, both the groups of KTCPL in order to a micably settle and resolve their dispute arrived at a settlement by entering int o a memorandum of understanding (MoU) on 03.07.98. In terms of such MoU, the ass ets of erstwhile KTCPL, namely Kettela Tea Estate and Borgang Tea Estate and a Bunglow at New Delhi were grouped into two blocks. Block-I consists of Kettela Tea Estate and Block-II consists of Borgang Tea Estate and the said Bunglow in N ew Delhi. It was also agreed upon that new Company would be incorporated in due course which would be the owner of Block-II assets. In the result KTCPL shall co ntinue to be the owner of Kettela Tea Estate and the new Company would be the ow ner of Borgang Tea Estate and both the groups would be the owner of one Company each. 7. M/s. Borgang Tea Estate Pvt. Ltd., the petitioner No. 1 was thereafter i ncorporated on 30.11.98 and it was mutually agreed upon between the aforesaid tw o groups that the present respondent No. 4 would be the owner of M/s. Kettela Te a Company Pvt. Ltd. The terms of settlement and the compromise were given effect to. A scheme of arrangement was entered into between the petitioner No. 1 and t he respondent No. 4 and the respective share holders on 01.04.99. The said schem e of arrangement detailed as to how the assets and liabilities of erstwhile KTCP L would be divided amongst the two companies, i.e. the petitioner No. 1 and the respondent No. 4. Clause -iv of the scheme of arrangement laid down the terms an d conditions with regard to engagement of workers in the two Tea Estates. The pe titioner No. 1 undertook engagement of those persons who were in service in Borg ang Tea Estate under the erstwhile KTCPL. 8. After such developments the petitioner No. 1 and the respondent No. 4 fi led an application before this Court under Section 391 (2) and 394 of the Compan ies Act, 1956 praying for approval/sanction to the aforesaid scheme of arrangeme nt. The application which was registered and numbered as Company Petition No. 7/ 99 in Company Appeal No. 31/98 had the following prayers: (a) The scheme of Arrangement mentioned in paragraph 1 of this petition being A nnexure-’A’ hereto be sanctioned by this Hon’ble Court to be binding with effect from the 1st day of April, 1999 or from such other date as this Hon’ble Court m ay fix on Borgang Tea Company Private Limited, Kettela Tea Company Private Limit ed and their shareholders and all concerned. (b) all the property, rights and power of Kettela Tea Company Private Limited re lating to the Borgang Tea Estate including those mentioned in the schedule of as sets filed herein, be transferred without further act or deed to Borgang Tea Com pany Private Limited accordingly the same shall pursuant to section 394 (2) of t he Companies Act, 1956 be transferred to and vest on Borgang Tea Company Private Limited for all the estate and interest of Kettela Tea Company Private Limited therein free from all charges effecting the same. (c) all the debts, liabilities, duties and obligation of Kettela Tea Company Pri vate Limited, in/or relating to the Borgang Tea Estate transferred without furth er act or deed to Borgang Tea Company Private Limited and accordingly the same s hall, pursuant to Section 394(2) of the Companies Act, 1956, be transferred to a nd become the debts liabilities, duties and obligations of Borgang Tea Company P rivate Limited. (d) all proceedings and/or suits and/or appeals now pending by or against Kettel la Tea Company Private Limited in respect of the Borgang Tea Estate be continued by or against Borgang Tea Company Private Limited. (e) Borgang Tea Company Private Limited and allot to the shareholders of Kettela Tea Company Private limited the shares in Borgang Tea Company Private Limited t o which they are entitled under clause 10 of the said scheme of Arrangement. (f) leave to be granted to the petitioner to file the schedule of assets of Borg ang Estate of Kettela Tea Company Private Limited stated in paragraph 20 of the petition within three weeks from the date of the order to be made herein. (g) Borgang Tea Company Private Limited and Kettela Tea Company Private Limited do within 30 (thirty) days after the date of the order to be made herein cause a certified copy thereof to be delivered to the Registrar of Companies, Assam and Meghalaya etc. for registration. (h) any person interested shall be at liberty to apply to this Hon’ble Court in the above matter for such direction as may be necessary. (i) such further orders or orders be made and/or directions be given as this Hon ’ble Court may deem fit and proper. 9. This Court by order dated 18.11.99 granted approval/ sanction to the sai d scheme of arrangement. It was ordered that there shall be orders in terms of t he aforesaid prayers. Thereafter, the respondent No. 4 by its Annexure-III lette r dated 25.01.01 forwarded 189 numbers of transfer forms in triplicate which wer e relating to permanent and temporary employees of the petitioner No. 1 for tran sfer of net credit of provident fund balance. The list of said 189 employees wer e enclosed with the letter. According to the petitioner although the MoU dated 0 3.07.98 contained the facts and figure regarding the size, number of the employe es etc. (Schedule-II), but those figures were only approximate and the actual de tails of the employees and the staff working in Kettela and Borgang divisions of the erstwhile KTCPL were available with the Manager of the respondent No. 4. By the aforesaid letter dated 25.01.01, the petitioner No. 1 was informed that the re were 189 permanent and temporary employees engaged in Borgang division and a ccordingly were transferred to the petitioner Company. It is in this context, it is the case of the petitioners that as per the own demand of the respondent No. 4, the petitioner No. 1 was required to absorb 189 permanent and temporary emp loyees, which has been done by the petitioner No. 1. It is their case that there is no further obligation to absorb any more employees of the respondent No. 4. 10. The respondent No. 4 filed an application u/s. 9 of the Arbitration and Conciliation Act, 1996 before the Calcutta High Court which was registered and n umbered as AP No. 15/2001 with the following prayers: (a) Leave under clause 12 of the Letters Patent. (b) An injunction to issue restraining the respondents and/or each of them, thei r servants and/or agents from selling and/or supplying any of the Green Leaf pro duction of the respondent No. 1 to any third parties whatsoever. (c) A Receiver be appointed over the entire production of Green Leaf of the resp ondent No. 1 for the purpose of taking possession thereof and selling and/or sup plying and/or handing over the same to the petitioner No.1/ petitioners in terms of the clause 7 of the Memorandum of Understanding dated 3rd July, 1998. d) The Receiver so appointed be directed to ensure that both the petitioners’ an d the respondents act in terms of Clause 7 of the Memorandum of Understanding da ted July, 3, 1998. e) The Receiver so appointed be directed to collect a sum of Rs. 3.50 per month from the respondents and hand over the same to the petitioners for the purpose of paying the wage and/or maintaining 148 permanent labour force and 5 permanent staff of the petitioner No. 1 who were meant to be absorbed into the responden t No. 1 in terms of the Memorandum of Understanding dated July, 3, 1998. f) The respondent be directed to furnish a sum of Rs. 50 lacs by way of security to the receiver in terms of Clause 2.4 and 5 of the Memorandum of Understanding which sum is to be invested by Receiver in a sort terms fixed deposit till the disposal of the Arbitration proceeding. g) Injunction do issue restarting the respondents from withdrawing any money fro m respondent No. 1 and /or making any payment to any third party before paying t he said sum of Rs. 50 lacs. h) Ad-interim orders in terms of payers above; i) Costs; j) Such further and/or other order or orders be passed and/or direction or direc tions be given as to this Hon’ble Court may deem fit and proper. 11. After filing of the aforesaid application with the prayers mentioned abo ve, both the parties, i.e. the petitioner No. 1 and the respondent No. 4, enter ed into a settlement, incorporating the terms and conditions of which an applic ation was filed before the said Court. Pursuant to such settlement, the Calcutta High Court by its order dated 29.03.2001 recorded that the terms of settlement which was signed by both the parties and their respective Advocates were bonafid e and accordingly the matter was disposed of in terms of the said settlement. Th e order was passed on 29.03.01 (Annexure- IV) which is quoted below: A.P. NO. 15 OF 2001 IN THE HIGH COURT AT CALCUTTA ORDINARY ORIGINAL CIVIL JURISDICTION ORIGINAL SIDE Plaintiff/Petitioner/Appellant : KETTELA TEA COMPANY PVT. LTD. & ORS. Versus Defendant/Respondent : BORGANG TEA COMPANY PVT. LTD. & ORS. BEFORE The Hon’ble Justice D.K. Seth Date : MARCH 29, 2001 DICTATED ORDER THE COURT: It is contended on behalf of the respondents that the matter has since been settled out of Court. Accordingly a Terms of Settlement has been fil ed. The said terms of Settlement appears to have been signed by the respective p arties and their Advocates-on-record. The Terms of Settlement appears to be bona fide. In the circumstances, let the suit be decreed in terms of the Terms of Settlemen t and the Terms of Settlement do form part of the decree. All parties including the Department are to act on a Xerox signed copy of this d ictated order on the usual undertaking. Sd/- Plea of the petitioners 12. In the aforesaid background facts, it is the case of the petitioner that the aforesaid terms of settlement which has become a decree of the Court is bin ding on both the parties, i.e. the petitioners and the respondent No. 4. Be it s tated here that the aforesaid order has not been challenged in any competent Cou rt of law and thus according to the petitioners same has attained its finality a nd is binding on the parties. It is the further stand of the petitioner that as per Clause -2 of the Terms of Settlement, the MoU dated 03.07.98 stood fully imp lemented by and between the parties. As per Clause-6, the respective Company has engaged permanent labour and staff in accordance with the scheme of arrangement . Clause -6 also recites that the parties agree not to raise any further dispute with regard to their reciprocal obligations, if any under or in connection with the MoU dated July, 3, 1998. For a ready reference clauses -2 and 6 are quoted below. 2. It is recorded that the Memorandum of Understanding dated July, 3, 1998 (he reinafter referred to as MoU) stands fully implemented by and between the partie s. 6. It is recorded that the respective Companies have engaged permanent labourer and staff in accordance with the scheme of arrangement filed before and sanction ed by the Hon’ble Gauhati High Court. The parties agree not to raise any further dispute in regard to their reciprocal obligations, if any under or in connectio n with the MoU dated July, 3, 1998. 13. According to the petitioners, although all the disputes by and between t he parties have been settled amicably, the respondent No. 4 in a most illegal an d arbitrary manner has been trying to saddle the petitioner No. 1 with the liabi lity of 151 workers and 8 staff who are in the employment of the respondent No. 4. It is the stand of the petitioners that after the aforesaid order dated 29.0 3.2001 passed by the Calcutta High Court in the form of a decree incorporating the terms of settlement and the parties thereto having already engaged their res pective workmen and staff and the scheme of arrangement having been approved by this Court and further the MoU dated 03.07.98 having completely been complied w ith, there cannot be any further dispute relating to employment of workmen and s taff. 14. According to the petitioners, the respondent No. 4 in gross violation of the aforesaid order/decree dated 29.03.2001 passed by Calcutta High Court and i n collusion with the respondent No. 5 raised a dispute contending inter alia th at the petitioner No. 1 had violated the terms and conditions of the MoU dat ed 03.07.98 and the scheme of arrangement which was sanctioned/ approved by this Court. Such dispute having been raised, a conciliation proceeding was held and the same resulted in failure. The impugned Reference 15. In view of the failure of the conciliation proceeding, the Govt. of Assa m in the Labour and Employment Department issued Annexure-V notification dated 1 3.08.07 in purported exercise of power conferred by Clause-C (i) of Section 10 o f the Industrial Disputes Act, 1947. The Schedule of reference is as follows: SCHEDULE 1) whether the management of M/s. Borgang T.E. is justified by not taking 1 51 and 8 Nos. of workers and staff respectively from the M/s. Kettela T.E. 2) If not, what relief M/s. Kettela T.E. is entitled to 3) Which management will take responsibility of 151 and 8 Nos. of labourers and staff respectively This cancels the earlier notification issued vide No. CLR 200/2005/54 dated 21.0 2.07. 16. On receipt of the aforesaid reference, the Labour Court registered Refer ence Case No. 1/08 and vide Annexure-VI notice dated 07.01.08 directed the respe ctive parties to file written statement. Stand of the petitioners in respect of the reference 17. Although the Annexure-VI notice shows the alleged dispute to be one betw een the petitioner and the respondent No. 4 and the workmen, but the purported d ispute is between the petitioner No. 1 and the respondent No. 4, more particular ly when the reference notification dated 13.08.07 clearly speaks of the referenc e being made at the behest of the respondent No. 4. It is the stand of the petit ioners that the workers themselves have not claimed any relief against the petit ioner No. 1 and it is the respondent No. 4 who in a most illegal manner is tryin g to thrust upon the petitioners with the liability of 151 workers and 8 numbers of staff who are in employment of the said respondent No. 4. In fact, the respo ndent No. 4 by its application dated 05.04.08 filed before the learned Labour Co urt clearly admitted that the alleged dispute was between the management of Kett ela Tea Estate and the Management of Borgang Tea Estate regarding absorption of 151 workers and 8 numbers of staff who are in employment of the respondent No. 4 . 18. According to the petitioners, in view of the background facts stated ab ove there cannot be any dispute between the parties so as to make a reference ou t of the same. Referring to the provisions of the Industrial Disputes Act, it is the stand of the petitioners that the terms of reference do not constitute any Industrial dispute so as to be tried by the Labour Court. Counter Affidavits/ Rejoinder Affidavits 19. A number of affidavits have been filed by the parties as affidavit in op position, affidavit in reply and additional/supplementary affidavit referring t o the terms of MoU dated 03.07.98, it is the stand of the respondent No. 4 that the petitioner No. 1 has absorbed only 174 permanent labourer and 4 number of p ermanent staff leaving aside the remaining 151 workers and 8 numbers of staff wh o are presently engaged with the respondent No. 4. According to the said respond ent, the petitioners by not absorbing the said workmen and staff have violated the MoU causing additional burden on the respondent No. 4 20. The respondent No. 5 representing the workmen supporting the reference h as contended that the services of the workmen are not dependent upon certain und erstanding, terms of settlement etc. entered into by and between the parties, i. e. the petitioner No. 1 and the respondent No. 4. According to them as per the t erms of settlement, the workmen and staff in question stood transferred to the p etitioner No. 1 and the petitioner No. 1 is duty bound to accept them. It is the ir stand that they have been rendered jobless due to inaction on the part of the petitioner No. 1 in violation of the MoU. Argument 21. Learned counsel for the parties reefing to the background facts, relevan t documents and catena of decisions made their elaborate arguments. Mr. A.K. Bha ttacharyya, learned Sr. counsel assisted by Mr. N. Deka, learned counsel appeari ng for the petitioners submitted that the issue relating to the transfer and abs orption of workmen and staff having been resolved as per the terms of settlement , the respondent No. 4 could not have resiled back from that position even to th e extent of raising a dispute in respect of the same issue. Referring to the pro visions of the Industrial Disputes Act, he submitted that leaving aside the lega l position as per the terms of settlement, no dispute could have been raised by the respondent No. 4. Even otherwise also the reference itself is vitiated bein g not within the purview of section 10 of the Act. 22. Mr. N. Dutta, learned Sr. counsel opening the argument on behalf of the respondent No. 4 insisted on dismissal of the writ petition without entering in to the merit of the case on the ground that the issues which has been raised in this proceeding could be gone into by the labour Court if raised by the petiti oners. He submitted that having regard to the facts and circumstances involved i n the case, this Court will be reluctant to go into the disputed questions of f act so as to answer the question as to whether the particular reference in the g iven fact situation is bad in law. Touching on merit of the case he submitted th at the aforesaid order of the Calcutta High Court cannot be construed to be a de cree which is also a nullity and consequently can be challenged in any proceedin g even collaterally. Referring to the terms of the settlement, MoU etc., he subm itted that the dispute which the petitioners have asserted to have attained fina lity, is incorrect. 23. Mr. D. Baruah, learned counsel representing the respondent No. 5 Union s ubmitted that it is the apprehension of the workmen and the staff in question th at there is collusion between the petitioner and the respondent No. 4. According to him the respondent No. 5 being not a party to the proceeding mentioned in t he background facts, any amount of settlement, MoU and the order of Court cannot bind the said workmen and staff. He submitted that the workmen and the staff in question cannot be denied employment in view of the dispute between the petitio ner No. 1 and the respondent No. 4 and that what the workmen and the staff want is employment and it is immaterial as to under whom they are engaged. 24. Learned counsel for the parties have referred to numerous decisions to bring home their points of argument. The decisions are on the interpretation of the principles relating to raising of Industrial disputes, employer and employe e relationship, consequence of a decree being a nullity, jurisdiction and compet ence of the Labour Court, jurisdiction of the Writ Court in disputed questions o f fact, collusive litigation raising of dispute in a matter etc. The decisions o n which the learned counsel for the parties have placed reliance are as follows: Decisions referred to On behalf of the Petitioners 1) 1954 (ii) LLJ 314 (Odeon Cinema vs. Workers of Sagar Talkies) 2) 1957 (i) LLJ 639 (Workers of Sagar Talkies Vs Odeon Cinema) 3) (2001) 9 SCC 557 (Bongaigaon Refinery & Petrochemicals Ltd. vs. Samijudd in Ahmed ) 4) (2004) 3 SCC 514 (Workmen of Nilgiri Coop. Mkt. Society Ltd. vs. State o f T.N. and others) 5) (2004) 10 SCC 460 (Mukand Ltd. vs. Mukand Staff & Officers’ Association) 6) (1977) 2 SCC 662 (Sunder Dass vs. Ram Prakash ) 7) AIR 1969 SC 823 (Official Trustee, West Bengal and others vs. Sachindra Nath Chatterjee and another) 8) AIR 1970 MP 237 (Bhaiyalal Girdharilal Shrivastava vs. Tikaram Udaichand Jain) 9) 1998 (3) RAJ 7 (raj) (State of Rajasthan & others vs. Bharat Constructi on Co. and others) 10) AIR 1956 SC 593 ( Nagubai Ammal and others vs. B. Shama Rao and others) 11) AIR 1965 SC 1216 (Commissioner of Income Tax madras vs. The Commissioner of Income Tax Madras) 12) AIR 1969 SC 823 (Official Trustee, West Bengal and others vs. Sachindra Nath Chatterjee and another) 13) AIR 1964 SC 907 (Ittyavira Mathai vs. Varkey Varkey and antoher)