1 IN THE HIGH COURT OF JUDICATURE AT BOMBAY BENCH AT NAGPUR, NAGPUR. WRIT PETITION NO: 3756 / 1999 Spring Fresh Drinks Pvt.Ltd. C/o C/101 MIDC Industrial Area, Hingna Nagpur By Its Director . ... PETITIONER v e r s u s 1) National Vidarbha Ice and Cold Drinks Workers Union (INTUC) Bansal Villa Compound, Katol Road, Nagpur By its General Secretary ( ori.complainant) 2) Vidarbha Beverages Pvt. Ltd.. C-102 MIDC, Hingna Road, Nagpur By Its Manager (ori.Respondent No.2) ...RESPONDENTS ................................................................................................................................... Mr. S V Manohar, Adv.with Mr S.S.Ghate, Advocate for petitioner Mr V.A.Dhabe,Advocate for Respondent No.1 ------------------------------------------------------------------------------------------------------------------ 2 CORAM: B. P. DHARMADHIKARI, J. DATED: 3rd December, 2010 ORAL JUDGMENT : 1. By this petition filed under Articles 226 and 227 of the Constitution of India, the petitioner-employer has questioned the order dated 14.12.1998 delivered by the 1st Labour Court at Nagpur in Complaint (ULPA) No. 427/ 1986 granting relief of reinstatement to workers with continuity of service and back wages and the subsequent order dated 21st September, 1999 passed by Industrial Court, Nagpur in Revision (ULPA) No. 11/1999. 2. The petitioner before this Court is a Private Limited Company and respondent no.1 before this Court is a Union of employees working with it. The Respondent No.2 was joined before Lower Courts by respondent no.1 as sister concern of the petitioner. It is not in dispute that provisions of Bombay Industrial Relations Act govern the relationship between the parties. 3. The Respondent No.1-Union filed the Complaint (ULPA) No. 427 / 1986 under section 28 read with Item 1 Clause (a) to (c) of Schedule IV of the Maharashtra Recognition of Trade Union and Prevention of Unfair Labour Practices 3 Act, 1971 ( in short “the Act of 1971” ) before the Labour Court challenging the termination effected by notice of retrenchment dated 13.9.1986 on the ground that reason given therein was false and petitioner was carrying out manufacturing activity at its sister concern. It was also alleged that provisions of Industrial Disputes Act - like Section 25-G, were violated. This complaint was opposed tooth and nail by the petitioner-employer by denying all contentions and by contending that for want of orders production was required to be reduced and hence retrenchment was resorted to. It was stated that the Management decided to have production again after 31.1.1987 for the summer of 1987. The fact of respondent no.2 being a sister concern or of continuing manufacturing activity with respondent no.2, was denied. On the basis of these pleadings parties went to trial. The Respondent No.1-Union examined one Siddartha Thool and Sampat Phukhat as its witnesses and petitioner examined its Managing Director-Hasmukh Panchmatiya. 4. After appreciating this evidence, the Labour Court found that respondent no.2 is not the sister concern of the petitioner or then it was not only a paper establishment shown with some ulterior and oblique motive. It also found that there was no collusion between the petitioner and respondent no.2. It also found no substance in contention of respondent No.1- Union that its members who had incurred displeasure of management due to their active trade 4 union activities were being victimised. However, it found that the retrenchment was not bona fide and suffered from undue haste and was not legal; it was for false reasons and constituted victimisation and was effected in bad faith and in colourable exercise by its employer. It, therefore, found that the workers mentioned in paragraph 3 of the Complaint except at Sr.Nos. 2,7,8 & 11 to 14 were entitled for reinstatement with continuity of service and back wages. It dismissed the Complaint as filed, insofar as those workers at Sr.Nos. 2,7,8 & 11 to 14 are concerned. These findings are upheld by the Industrial Court. 5. This Court admitted the Writ Petition for final hearing on 13th October, 1999 and granted interim relief in terms of Prayer clauses (iii) and (iv) of the Writ Petition. The amount of Rs.2,50,000/- deposited in the Industrial Court by petitioner was permitted to be withdrawn by respondent no.1-Union vide orders dated 22.8.2000 subject to their furnishing adequate security and undertaking. In this background, I have heard Advocate S.V.Manohar with Advocate S.S.Ghate for petitioner-employer and Advocate V.A.Dhabe for respondent no.1- union. 6. After inviting attention to pleadings and both the orders, Advocate Manohar has invited attention to the evidence of S/Shri Siddartha and Sampat to urge that after the issuance of retrenchment notice and termination in 5 consequence thereof. It is admitted position that both the shifts were discontinued and, therefore, there was no manufacture of any cold drink by petitioner. According to him, it is also proved on record that thereafter whenever work became available, the petitioner has called upon the workers to report for duties and workers accordingly reported for duty only in 1987 and chose not to report in 1988-89. The agreement for production of cold drink was with a Delhi based establishment which was supplying the concentrate. That agreement expired in 1990 and after 1990 there was no production at all. Hence, in this situation, when there was closure of manufacturing activity in 1990, grant of relief of reinstatement with continuity and back wages is totally unwarranted. The learned counsel contends that even procedural lapses while complying with provisions of Section 25-F or 25-G are not established and finding to that effect as recorded, is incorrect. The emphasis is on case as pleaded by respondent no.1 to urge that finding of false pretext for retrenchment is de hors the story. The judgment of Industrial Court is also stated to be suffering from error apparent because of similar approach. The learned counsel states that finding of Industry making some profits and not in losses is not proper and cannot be sustained. There cannot be any undue haste as petitioner had agreement for a period of five years and after effecting retrenchment, waited for more than reasonable time for business to pick up. Learned counsel has placed reliance upon judgment of the Hon'ble Apex Court reported in (2010) 9 SCC 126 in the matter of 6 Incharge Officer and another vs. Shankar Shetty, to urge that in such a situation grant of relief of reinstatement with back wages is totally unsustainable and without prejudice to this contention and, in the alternative, the learned counsel has stated that in appropriate case the relief of payment of some compensation could have been looked into. 7. Advocate Dhabe for respondent no.1- Union has supported both the orders. He has relied upon the judgments of the Hon'ble Apex Court in 1973 LAB IC 104 = AIR 1973 SC 76 in the matter of Managing Director MIG Hindusthan Aeronautics Ltd. vs. Ajit Prasad Tarvav; 2009 AIR SCW 4664 in the matter of Dipali Dey (Baxi) vs. Mira Das ; 2010 (4) UPLJ 69 (SC) in the matter of Ritesh Tewari and another vs. State of U.P. & others and (2005) 3 SCC 193 in the matter of Management of Madurantakam Co-op.Sugar Mills Ltd vs. S.Viswanathan, to urge that when findings recorded by Courts below are concurrent, in writ jurisdiction this Court cannot interfere with the same. Contention is even if said orders are found to be illegal, this Court cannot in exercise of that jurisdiction, correct the same. 8. Learned counsel has invited attention to notice of retrenchment to point out the reasons disclosed therein. According to learned counsel the reasons were within the knowledge of petitioner and material to support the same ought 7 to have been produced. It is urged that though the decision of management is disclosed, material produced by the management or then resolution of management, if any, are not shown and proved. The manufacturing activity was going on from 1979 till 13.9.1986 and there was absolutely no reason to suddenly discontinue it when in 1986 the factory had made some profits. 9. Learned counsel further states that the evidence about discontinuation of manufacturing activity is also not satisfactory because, at one place the petitioner has stated that it was closed down in October 1989 ; while at other place, it has been stated that production continued till 1990. Attention is invited to some documents filed before this Court along with counter-affidavit dated 7.10.2010 to urge that witness Siddartha has continued till 2003 and hence the production was going on at least till 2003. It is urged that Siddartha has challenged his 2003 termination independently before the Labour Court and that Complaint is under the seisin of that Court. The voucher issued by the Provident Fund Department to said Siddartha for the period from 1st April,1998 to 31st March, 1999 is also pressed into service. The receipt issued by the Provident Fund Department to subscriber for the year 2001-02 showing payment of contribution is also pressed into service for this purpose. According to learned counsel, the production was not discontinued in 1990 and continued even thereafter. 8 10. Attention has been invited to the fact that from 1979 till September, 1986 the industry was carrying on manufacturing activity for all 12 months in a year, that is, it was of perennial nature. After 13.9.1986 for the first time, the nature of industry was changed and effort was to show that it was a seasonal industry. According to Advocate Dhabe, this is not possible without issuing notice of change as contemplated by Section 42 (1) of Bombay Industrial Relations Act. 11. Learned Advocate has also invited attention to the affidavit filed by the petitioner on record on 17.9.2010 to urge that the alleged sale of plot on which the industry of petitioner has been functioning to a third party, has been brought on record for the first time before this Court. He contends that inspite of this sale, the production has continued at same place. 12. Advocate Manohar, in reply, has pointed out that the Labour Court on 23.2.1988, on an application moved by petitioner-employer, directed the members of respondent no.1 to report to duty but, that order was not obeyed. The employees did not report for duty either in March 1988 or March 1989 and only three of them had joined. In view of this admitted position, according to learned counsel, this is not a fit case for grant of back wages. 9 13. The concurrent consideration by Labour and Industrial Courts reveal that the respondent no.2 is not a sister concern of the petitioner. The Labour Court has found that the termination or retrenchment was not on account of any trade union activity. The offer of retrenchment compensation was also not in dispute. It, however, noted that a valid reason for retrenchment is a condition precedent and such reason must be true. If the reason is untrue, the retrenchment would constitute unfair labour practice under Item 1 Schedule IV of the Act of 1971. The burden to show that reason for retrenchment was true and correct was upon petitioner-employer. It noted that less demand of cold drink i.e. product, was the reason put forth along with heavy losses due to less production. It noted that employer miserably failed to prove said fact by producing any document on record. It has noted that certificates issued by the Chartered Accountant from the year 1980 up to 1983 revealed that proportion of losses was decreasing every year. In the year 1985, there was a loss of Rs.3,197/- only ; whereas in earlier year that loss was Rs.7,09,292/-. In the year 1986, there was profit of Rs.36,713.13. Because of this material available on record, it found that reason of loss being pressed into service by employer could not have been accepted. In paragraph 21 it noticed that while retrenching the workers; assurance was given to them to re-employ them as and when work became available. It noticed that in March, 1987 these workers were called upon 10 to join duties and some of the workers joined and were paid up to 1st August, 1987. In Paragraph 22, it has noticed that agreement at Exh.159 between the petitioner and Campa Beverages Private Limited, New Delhi was for a period of five years and its clause (vii) enables the company to terminate the agreement if manufacturer ceased to deal in soft drinks or closed its business. It also noted that the petitioner never informed these developments to M/s Campra Bevearages Pvt. ltd. It noted the admission in cross-examination by petitioner that till 1990 it continued production as per that agreement. Because of this admission and position on record, it found that in absence of any documents on record, the reason given for effecting retrenchment in the month of September, 1986 did not appear to be true. In Paragraph 23 it noted that there was non-compliance with provisions of Section 25-G inasmuch as on 30th August, 1986 vide Exh.134 seniority list was published and objections thereto were invited. The evidence of Siddartha in Paragraph 11 shows that seniority list was displayed on 21.8.1986 and they objected to it. He also stated that objections were raised and finalised. However, he feigned ignorance about the list dated 30.8.1986. The evidence of Hasmukh shows that seniority list dated 30.8.1986 was produced at Exh.134. He also stated that objections were invited earlier vide Exh. 135. He has also stated that after receiving objection, seniority list was displayed. He also produced on record copy of notice dated 21.8.1986 as Exh.136. In view of this material available on record, the Labour Court found that provisions of Section 11 25-G read with Rule 81 of the State Rules under Industrial Disputes Act, were complied with. 14. Thus, the Labour Court has found that reason put forth for effecting retrenchment was not substantiated and, therefore, has set aside the retrenchment and granted relief as mentioned above. 15. Perusal of notice of retrenchment dated 13th September, 1986 reveals that the Management communicated to employees that for past two months it was paying wages without any production and hence the Board of Directors decided to start production of cold drinks one month before summer which is the season for soft drinks. Hence production in factory would be closed up to 31.1.1987 and those employed in manufacturing process were, therefore, retrenched. The amounts on account of retrenchment were reflected in the chart accompanying it and also in individual notice sent to employees. The Management also communicated that these workers would be given precedence while resuming production and directed them to supply their permanent address for communication in this respect. 16. The findings of Labour Court upheld by Industrial Court above, are sought to be assailed by inviting attention to evidence of Siddartha in paragrpah 12 11 wherein he stated that in one shift 9696 bottles were manufactured and work was going on in two shifts. He also stated that in off-season work was on only in one shift and, after retrenchment, both the shifts were closed. He also stated that it was off-season when workers were retrenched. He has asserted that the stand of petitioner that for want of demand both the shifts were closed was not correct. He accepted that prior to their retrenchment there was no production in petitioner-industry. The evidence of Sampat does not throw any light in this respect. Perusal of evidence of Hasmukh shows that due to loss it was decided to reduce production and take production during season only. He has stated that in March, 1987 when work was available retrenched employees were re-employed till 31.7.1987 and, after 31.7.1987 work was not available. He has thereafter stated that in March 1988 and March 1989 he issued notices to employees asking them to join duties and in spite of receipt of notice only three employees turned up and reported while others did not join. He in cross-examination also accepted that no notice of change was issued to employees in the year 1986 or prior to it. His deposition has been recorded in November, 1995 and he has stated that since last five years, the factory was closed. He stated that no effort was made to reduce the strength of workers proportionately with production. He voluntarily disclosed that minimum 11 workers were required for production. At the end of his cross-examination, he has stated that as per agreement at Exh. 139 the petitioner continued with production till the year 1989. 13 17. This material, therefore, does not show that there was any decision by petitioner either to discontinue production or then to start production only one month before season. The absence of demand from market and its effect on production schedule has not been brought on record by the petitioner at all. Even if all facts are accepted, it only shows that for two months prior to 13th September, 1986 there was no production. It further shows that production was to commence one month before season. It does not show that there was no market to the product and hence such decision was required to be taken. 18. Though Respondent No.1-Union approached the Labour Court with specific case of transfer of production by petitioner to Respondent No.2, that case has not been established. But then the absence of production in establishment of petitioner after retrenchment notice or then only during season, is also not sufficient to substantiate the reason given in notice for retrenchment dated 13th September, 1986. The Labour Court has correctly appreciated the facts which have come on record in this respect and has recorded a finding that retrenchment was on false pretext. Employer could have produced its accounts and production returns or schedules to justify its action and that has not been done. It has found retrenchment not bona fide or with undue haste because it was not supported by any material by the management. 14 19. These findings are findings on appreciation of relevant facts and material on record. The burden to show genuine reasons for effecting retrenchment was upon the petitioner. The only proof of fact of no production in past two months or then production only during season is not sufficient to sustain the action of retrenchment when it is challenged as mala fide. The petitioner could have produced its records to show the decreasing demand or then to show actual losses. That has not been done and even the resolution of Board of Management supporting the action for retrenchment has not been filed. I, am, therefore, not in a position to interfere with concurrent findings of fact. 20. The learned counsel for the petitioner has, in the alternative, urged that in such circumstances, relief of reinstatement that too with full back wages could not have been ordered. According to learned counsel, when period of more than 24 years has expired now, such relief has become impracticable. The reliance is placed on the judgment of the Hon’ble Apex Court in the case reported in Incharge officer and another vs. Shankar Shetty ( supra ) for that purpose. 21. I find that in reported judgment the employee was on daily wages and his termination was found in violation of Section 25F of Industrial Disputes Act, 1947 (hereinafter referred to as “ID Act”). The Hon’ble Apex Court has also 15 mentioned the number of days for which the respondent – employee before it worked from 1978 till 1985. The Labour Court had rejected the claim of the employee holding that Section 25F of the ID Act was not attracted. Karnataka High Court held that provisions of Section 25F of the ID Act were attracted and hence his termination was illegal. On 13.08.2001, the learned Single Judge of that High Court directed reinstatement without back wages. The Division Bench of that High Court rejected writ appeal. In employer's appeal, the Hon’ble Apex Court noted that employee had worked for a period of seven years intermittently and that was about 25 years back. In that view of the matter, it awarded him compensation of Rs. One lakh in view of the reinstatement. In facts before me, the employees were not on daily wages and the reason given for retrenchment is found to be unsustainable. 22. The petitioners claimed to have sold the land on which the manufacturing activity was going on i.e. Plot No. C-101, MIDC Area, Hingna Road, Nagpur on 05.05.2000 to one India Thermit Corporation Limited. Copy of that sale deed is placed on record along with affidavit on 08.09.2010. That sale deed also mentions that purchaser has been placed in actual, physical and vacant possession of the property. Respondent No. 1 has filed counter affidavit of Siddharth stating that Union was never informed about any such sale. Attention has been invited to the fact that one Civil Application vide Stamp No. 14402 of 2002 was moved on 16 16.07.2002 by Respondent No. 2 seeking direction to the petitioner – employer to produce sale deed and other documents. But then this fact was not disclosed. The payment of provident fund contribution in provident fund account till 2003 is also pointed out with fact of termination of deponent vide order dated 11.04.2003. It is alleged on oath that provident fund returns were submitted under the signature of the Director Shri Hasmukh Panchmatiya only. It is also pointed out that Siddharth has filed ULPA No. 276 of 2003 before 4th Labour Court, Nagpur, challenging his termination and there Hasmukh Panchmatiya has informed that one company by name M/s. H.P. Industry has been sold by registered sale deed dated 12.05.2006. But then this sale was not disclosed. The written statement was filed in present matter before Labour Court on 02.03.1987 and in para 13A it contains an assertion by the petitioner that because of odd and critical situation as also financial crisis, the petitioner has closed down production activity of soft drinks since October 1989 and since then there is no activity also. Hasmukh Panchmatiya in his cross examination has accepted that till the year 1990, the production was going on. The documents show payment of contribution from same address in 1999. Thus, subsequent affidavit filed by the petitioner and counter affidavit filed by the respondent, give rise to some disputed questions which cannot be gone into in this jurisdiction. The petitioner has not chosen to amend its petition or to mould reliefs in the light of alleged subsequent developments. I am, therefore, not in a position to appreciate those developments in present challenge. 17 23. Not reporting for duty in March 1988 and 1989 does not by itself disentitle the employees to back-wages as entire action of petitioner is found to be not supported by appropriate material and hence an unfair labour practice. 24. In view of the discussion above, it is apparent that the judgment of the Hon’ble Apex Court in the case of Incharge Officer vs. Shankar Shetty (supra) is not applicable in present matter. As I do not find any jurisdictional error or perversity in the approach of Labour Court and Industrial Court, no interference is warranted. Writ Petition is, therefore, dismissed. However, in the facts and circumstances of the case, there shall be no order as to costs. JUDGE sahare