SCA/899120/2007 1/20 JUDGMENT IN THE HIGH COURT OF GUJARAT AT AHMEDABAD SPECIAL CIVIL APPLICATION No. 8991 of 2007 For Approval and Signature: HONOURABLE MR.JUSTICE S.R.BRAHMBHATT ================================================= 1 Whether Reporters of Local Papers may be allowed to see the judgment ? 2 To be referred to the Reporter or not ? 3 Whether their Lordships wish to see the fair copy of the judgment ? 4 Whether this case involves a substantial question of law as to the interpretation of the constitution of India, 1950 or any order made thereunder ? 5 Whether it is to be circulated to the civil judge ? ================================================= BLUE STAR LIMITED - Petitioner Versus S KALYANKRISHNAN - Respondent ================================================= Appearance : MR HARENDRA BANATWALA WITH MR VIRAL V DAVE for Petitioner: MR NILESH M SHAH for Respondent : 1, MR MAYANK DESAI for Respondent : 1, ================================================= CORAM : HONOURABLE MR.JUSTICE S.R.BRAHMBHATT Date : 07/10/2008 ORAL JUDGMENT 1. Heard learned counsels for the parties. Rule. Shri Mayank Desai with Shri Nilesh M Shah waives service of notice of rule for respondent. With the consent of the counsels for the parties’ rule is fixed forthwith. SCA/899120/2007 2/20 JUDGMENT 2. The petitioner under Article 226/227 of the Constitution of India has assailed the order & award passed by the Labour Court in Reference (LCV) No. 271/1998 dated 10/3/2005, and the order rejecting restoration application being Misc. Application No. 112 of 2005 passed on 11/1/2007; on the ground that the Labour Court has not passed the award strictly in consonance with law and, therefore, they are perverse and as such deserve to be quashed and set aside. 3. The respondent-workman herein above had to raise industrial dispute on his termination from the service. The competent authority referred the same to the Labour Court for adjudication, which came to be numbered as Reference (LCV) 271/1998. The statement of claims came to be filed by the respondent workman and the written statement also came to be filed on behalf of the employer taking up various contentions including that of non- maintainability of the reference in view of the contention that the respondent was not a “workman” so as to invoke the provisions of Industrial Disputes Act, and in alternative submission that the workman having resigned voluntarily and accepting the ensuing monetary benefits could not have raised the industrial dispute and the very reference was liable to be rejected. 4. The Labour Court issued notices on various occasions. It appears that no one appeared to defend the case of the employer and ultimately the impugned award came to be passed on 10/3/2005 recording clearly therein that despite of due service of notice and enough opportunities given, none has remained present for the employer to defend their case. Respondent workman's testimony was taken into consideration and the Labour Court decided the reference in favour of the workman recording its findings on the issues emerged from the claims statement as well as the written statement. As the said award SCA/899120/2007 3/20 JUDGMENT had been passed in absence of effective representation from the employer-petitioner, restoration application being Misc. Application No. 112 of 2005 came to be filed in Reference (LCV) 271/1998 under Rule 26-A of the Industrial Disputes (Gujarat) Rules 1966. Said application was resisted by the respondent workman and detailed reply was filed indicating therein that, the award as such can not be said to be ex parte so as to invoke jurisdiction of the Labour Court under Rule 26-A of the Industrial Disputes (Gujarat) Rules. It is also contended in the reply that the employer has not pointed out any cogent reason for justifying their absence during the proceedings. On the contrary the application made by the employer would show that they did receive notices and have the knowledge of the proceedings going on, such indolence on their part should not be encouraged and the restoration application therefore deserved to be rejected. The Labour Court after recording its findings on the rival contentions of the parties accepted the say of the workman and dismissed the restoration application vide its order dated 11/1/2007. Being aggrieved and dissatisfied with the award and order of dismissal of restoration application present petition is filed under Article 226 & 227 of the Constitution of India. 5. Shri Harendra Banatwala with Shri Viral Dave, learned counsels for the petitioner has contended that the restoration application was filed in time and the Labour Court ought to have taken into consideration the averments made in the restoration application as well as in the written statement. The Labour Court has merely proceeded on the basis of default in appearance on the part of the employer, though specific defence was urged in the written statement and it was also referred to in the restoration application with regard to the respondent being not a workman so as to invoke the provisions of the Industrial Disputes Act 1947 the Labour Court has not adverted to the same in the SCA/899120/2007 4/20 JUDGMENT impugned orders. 6. Shri Banatwala has further submitted that the prayer in this petition is confined only to quashing and setting aside the impugned ex parte award and order in the restoration application, and for a further direction to the Labour Court for hearing the reference (LCV) No. 271/1998 afresh after affording an opportunity of leading evidence to both the sides. Shri Banatwala under the instructions of his client – petitioner made a statement at the Bar that the petitioner is ready & willing to deposit Rs.2,00,000/- (Rs. Two lacs only) before the Labour Court and the same shall be permitted to be withdrawn by the respondent in case this Court is inclined to accept the submission for reopening the case. Shri Banatwala further submitted that depositing of the amount of Rupees two lacs is by way of cost and even if the reference is allowed to be reopened and decided on merits the said amount shall not be adjusted or subjected to the outcome of the Reference. Shri Banatwala further submitted that the ex-parte award deserved to be quashed and set aside and the restoration application ought to have been decided in light of the submissions made in the written statement. Shri Banatwala in support of his submissions has relied upon decisions of the Apex Court in case of KISHORE KUMAR KHAITAN & ANR v. PRAVEEN KUMAR SINGH, reported in AIR 2006 SC 1474, on observation made in para-12 with regard to power exercised under Article 227 of the Constitution and submitted that in a given case interference in finding of fact if taken in an improper manner is also warranted. Shri Banatwala also relied upon a decision of this Court in case of STATE BANK OF SAURASHTRA v. RASHMIKANT G. DAVE, reported in 2008 LLR 922 on the aspect of ex parte order/award and how the Courts have to approach such matter. Shri Banatwala has relied upon a decision of the Delhi High Court in SCA/899120/2007 5/20 JUDGMENT case of DARBARA SINGH vs. DTC, reported in 2007 LLR, 483 in furtherance of his submission with regard to approach to the ex parte awards of the courts. Another decision of this Court in case of JITUBHAI R. PARMAR vs. PROJECT TECHNOLOGIST PVT. LTD, decided on January 18, 2006 in Special Civil Application No. 3140 of 2004 and reported in 2006 JX (Guj) 45 : 2006 GLHEL 216183 in support of his submission that even in absence of express provision not empowering the Court to hear the second restoration, the workman should not be made to suffer for fault on the part of the representative of the workman. One more judgment of this Court was cited by Shri Banatwala in case of TDO V. DHURABHAI VIRABHAI VANKAR, decided on March 06, 2002 in Special Civil Application No. 1539 of 1998 and he submitted that, in view of these decisions the impugned award and the order deserved to be quashed and set aside. 7. Shri Mayank Desai with Shri Nilesh Shah, learned counsels appearing for the respondent workman contended that the prayers made in this petition are mutually exclusive and on the face of it they are not capable of being granted. In the same breath Shri Desai submitted that the scheme of I.D. Act as well as the I.D. (Gujarat) Rules do not permit an award to be challenged after it becomes operative. In the instant case it deserved to be noted that though restoration application being Misc. Application No. 112 of 2005 had been filed in time under Rule 26-A of Industrial Disputes (Gujarat) Rules, there was no application under Rule 26-B, meaning thereby the petitioner did not make any prayer whatsoever for seeking stay of the operation of the award. 8. Shri Desai submitted that without prejudice to the aforesaid contentions, the award impugned in this petition would go to show that the Labour Court has recorded its finding with regard SCA/899120/2007 6/20 JUDGMENT to affording enough opportunity to the petitioner for defending its case. Despite there being service of notice they have chosen not to appear and defend and instead they have permitted the Labour Court to proceed further or rather constrained the Labour Court to proceed further ex parte, if it can be called ex- parte. The Labour Court has dealt with all the issues raised in the written statement including that of respondent being workman or not. Therefore this award can not be said to be suffering from any infirmity whatsoever so as to call for interference under Article 227 of the Constitution. Besides the impugned award at Annexure-C had been passed in year 2004 and the petition was filed in 2007, meaning thereby the award had not been so far stayed and for the first time impugned award is challenged before this Court after long delay of about three years in 2007. This in itself would indicate sufficient prejudice caused to the respondent workman, and therefore on this count also the petition deserved to be dismissed. 9. Shri Desai has further submitted that the order made on restoration application would also go to show that the petitioner has remained hopelessly indolent in conducting the reference. They have not shown any reason for not remaining present before the Court. The scant regard shown to the Court deserves to be taken into consideration while examining the challenge to said order in the award. The conduct of the petitioner has disqualified them from seeking any equitable relief under Article 226 or 227 of the Constitution. Shri Desai further submitted that the ex parte award in fact is not an ex parte award and it need not be disturbed. 10. The order passed in Restoration Application being MCA No. 112 of 2005 is also just and proper as the petitioner have not shown any reason that could be said to have prevented them SCA/899120/2007 7/20 JUDGMENT from appearing and defending in reference. The petitioner have miserably failed in indicating any reason much less cogent reason for their absence before the Labour Court. 11. Shri Desai has relied upon various authorities in support of his submissions. Shri Desai has relied upon a decision of Delhi High Court in case of BANSAL INDUSTRIES v. DHARAM SINGH AND OTHERS, reported in 2000 LAB I.C. 820 in support of his submission that when no sufficient cause is shown the ex parte award can not be interfered with. Another decision relied upon by Shri Desai is in case of DELHI DEVELOPMENT AUTHORITY vs. PRADEEP KUMAR AND OTHERS, reported in 1996 (2) L.L.N. 417 and submitted that in absence of any sufficient cause for non-appearance before Labour Court excepting vague statement of change of panel of lawyers and misplacement of concerned file with old files etc. would not be sufficient for interfering with the award. Shri Desai further relied upon a decision of the Rajasthan High Court in case of THE STATE OF RAJASHTAN AND ANOTHER v. BHANWAR LAL AND ANOTHER, reported in 1982 LAB.I.C.75, wherein the State agency was deprecated for its negligence in attending Labour Court cases. Relying upon this decision he submitted that the interference with the order would amount to granting premium for the indolence of the employer-petitioner. Shri Desai also relied upon a decision of this Court [Coram: S.R. Brahmbhatt, J] decided on 16/9/2008 in Special Civil Application No. 11534 of 2008, wherein this Court did not interfere with the ex parte award of the concerned Labour Court and the restoration application was rejected. One more judgment of this Court [Coram: Miss Justice R.M. Doshit] decided on 6/4/1999 in Special Civil Application No. 2407 of 1999 is pressed into service wherein the Court summarily rejected the matter which was subject matter of LPA No. 362 of 2000, which came to be decided on 2/8/2000 wherein this Court SCA/899120/2007 8/20 JUDGMENT said that when sufficient opportunity is said to have been given and ex parte order has been passed and ultimately after giving sufficient notices to the employer the award was passed on the basis of evidence led by the workman, no interference was called for and the Division Bench refused to interfere with the order of learned Single Judge. Shri Desai submitted that in the instant case after affording sufficient opportunity to the petitioner and after waiting for long period and on the basis of the evidence led by the respondent and the written statement of the petitioner, the Labour Court ultimately passed the award and therefore, no interference is called under Article 227 of the Constitution. Shri Desai has also relied upon the decision reported in 2008 LLR 992 and another decision of this Court dated 25/4/2008 decided in Special Civil Application No. 26623 of 2006 in case of Taluka Development Officer Vs. Kantubhai Maganbhai Parmar in support of his submissions that the ex part award is not deserved to be disturbed. 12. This Court has heard the Counsels for the parties and perused the impugned order and award. It requires to be noted that the petition is filed under Article 226 / 227 of the Constitution making specific prayer assailing the ex parte award at Annexure-C and the order passed by the Labour Court in restoration application. Learned counsel Shri Banatwala for the petitioner has submitted at the Bar under instruction of his client that, this petition is now confined only to challenge against ex parte award and order on restoration application and for appropriate relief in the form of direction to the Labour Court to hear the reference afresh on merits. 13. The counsel for the petitioner has unequivocally submitted that they are absolutely ready & willing to deposit Rs.2,00,000/- before the Labour Court which may be permitted to be disbursed SCA/899120/2007 9/20 JUDGMENT to the respondent workman by way of cost and the same would not be adjusted or subjected to any further orders that may be ultimately passed by the Labour Court in reference. 14. Thus in short the petitioner’s prayer boils down to issuance of direction to Labour Court for hearing the Reference afresh after affording opportunity to both the sides. And if such direction is given then no prejudice is likely to cause to the respondent herein above as he receives Rs.two lacs by way of cost. 15. This Court is unable to accept the submissions of the Counsel for the respondent that once having failed in restoration application it was not open to the petitioner to challenge the ex parte award as by now it has become operative. There cannot be such restriction in challenging the ex parte award, on the contrary it is always desirable for party to first seek and avail the appropriate statutory remedy before moving this Court under Article 226 or 227 of the Constitution. If such embargo is read into the provision of law then Rule 26-A of the Industrial disputes (Gujarat) Rules would be rendered nugatory. It is always open to the party to firstly seek relief of Restoration from appropriate court and after failing there to challenge the order refusing restoration as well as the Ex Parte Award wherein of course the contesting opponent has all the right to resist the same on various grounds like delay and latches, prejudice etc. 16. As this Court has held that challenge to the ex parte award on merits under Article 227 of the Constitution, after having failed in attempts to have the same set aside in Restoration Application, is maintainable along with challenge to the order declining restoration, examining the Ex parte Award and order declining restoration of reference becomes necessary. In the SCA/899120/2007 10/20 JUDGMENT instant case as there is specific prayer for direction to the learned Labour Court for rehearing the reference on merits after affording full opportunity to both the sides the scope of examining the Ex Parte Award gets restricted and it is now confined only to its glaring and obvious infirmities warranting remand of the matter for hearing it afresh without going into the detailed analysis of evidence on record. It goes without saying that such an exercise becomes necessary even for examining the propriety and legality of the order rejecting restoration application. 17. In view of the aforesaid, before embarking upon examining the impugned ex parte award and order declining restoration, it is most expedient to set out few indisputable facts as they emerge from the record. In order to avoid detailed analysis of evidence while enlisting the indisputable facts, relevant extracts from the record in the very wordings and language of the parties in inverted coma have been reproduced. “(1)The Petitioner is a company incorporated under the Companies Act 1956. (2)The Respondent was initially appointed as an Account Assistant. (3) The Respondent as per the say of the petitioner came to be promoted as Manager (Accounts). (4) As stated by the petitioner the Respondent was working as Manager (Accounts) at the time of his termination. SCA/899120/2007 11/20 JUDGMENT (5)The Respondent has stated in his Statement of Claim in paragraph no.3 that ‘He had risen to the level of Manager – Accounts” (6)The Respondent has stated in paragraph no. 4 & 5 his Statement of Claim that “ That in pursuance of the aforesaid memo /termination letter of 26th, June 1997 the management also had extracted on 30th June 1997 one back dated letter of resignation from the Second Party” (7) The Respondent in his Statement of Claim in paragraph no. 7 that “ However vide letter dated 24.07.1997 to the management he had requested that the management just to avoid any sort of stigma and also to avail what could be the best out of the management which was already prejudicial to him, requested the management to convert the forced resignation into a retirement proposal in the Voluntary Retirement Scheme already in vogue at that point of time in the company. The request had never been responded by the management.” (8) The Respondent in his Statement of Claim in paragraph no. 8 that” That the second party therefore before the first party can act upon the resignation extracted from him in duress, formality (Sic: formally) withdraw his resignation vide his letter dated 21.08.1997.” (9) The Respondent in his Statement of Claim in paragraph no. 7 that “ That as mentioned earlier the second party was drawing Rs.10065 /-basic (Rs.21000/- approx inclusive of all perks) per month. Also as mentioned earlier he had no supervisory / managerial or administrative powers vested in him.” SCA/899120/2007 12/20 JUDGMENT (10) The Respondent has with his Statement of Claim produced various documents like letter of promotion dated 19.08.1994, Letter of designation to Manager Accounts dated 25.09.1994, Letter of Notice dated 26.06.1997 Resignation letter dated 17.06.1997 Withdrawal of Resignation dated 21.08.1997. Relieving letter dated 10.09.1997. (11) The Respondent has stated in his letter dated 21.08.1997 in paragraph no. 46 that “ The company by its letter dated 7th, July 1997 has communicated that it accepts my resignation prospectively i.e. from 16.09.1997 after working hours.” (12) The petitioner company wrote to the respondent on 10.09.1997 that as they had already accepted his resignation there was no question of withdrawing the same. (13) The Petitioner Company has in its written statement stated that “ It is requested that these preliminary issues which are raised by the company needs to be heard and decided first before deciding the merits of the matter. (14) The Petitioner Company has in its written statement in paragraph no. 3.1 raised objection that respondent was not workman as defined under Section 2(s) of the I.D. Act. (15) The Petitioner Company has in its written statement stated in paragraph no. 3.1 that “ He was also signing authority for various important documents such as bank statement, cheques and other relevant documents which otherwise can be signed by a person holding managerial capacity” (16) The Petitioner Company has in its written statement SCA/899120/2007 13/20 JUDGMENT stated in paragraph no. 7.10 that “ It is also pertinent to point out here that, Mr. S. Kalyan Krishnan was holding power of attorney for doing various activities on behalf of company since January 1994 and this power of attorney cannot be given to any ordinary employee unless and until he was discharging managerial functions.” 18. Against the aforesaid backdrop of facts, now, let us examine the contentions of learned counsels of the parties in respect of ex parte award as well as the order declining to restore the reference. 19. The facts narrated herein above go to show that as serious preliminary objections were raised in the written statement the Learned Labour Court ought to have addressed itself to it specifically and was required to record specific findings thereon based upon its own analysis of evidence available on record. It has come out on record that respondent himself has averred and stated before the Court that he was drawing Salary of Rs.21000/- per month when he was terminated in the year 1997 coupled with this averment the fact of his designation has also been stated but instead of recording its finding clearly on the aspect of ‘workman’ the last position held by the respondent is clearly ignored by the learned Labour Court as it has merely referred to the respondent’s initial appointment. The initial appointment looses its significance once the workman is promoted to higher posts. The lastly held post at the time of termination, and its nature, emoluments and duties attach therewith, are very relevant aspects and the Labour Court while deciding the issue with regard to second party being “Workman” or not, the Court has to address itself to these aspects and record it’s finding thereon. SCA/899120/2007 14/20 JUDGMENT 20. It also deserves to be noted that the respondent has himself averred and stated before the Labour Court that the First Party Company issued three months Notice vide its memo dated 26.07.1997. The Respondent has further stated before the Labour Court that prior thereto on 17.06.1997 he tendered Resignation Letter under coercion and duress, the Respondent has produced the same before the Labour Court along with the letter dated 16.07.1997 issued by Company revising his basic salary to Rs.10065 from Rs.9025 for motivating him for improving his performance. The Respondent has also produced on record of the Labour Court letter dated 21.08.1997 his purported withdrawal of resignation letter dated 17.06.1997 as it was to take effect from 16.09.1997. The Respondent has produced on record of the Labour Court letter dated 10.09.1997 issued by First Party Company informing him that his Resignation letter dated 17.06.1997 had already been accepted and hence there was no question for withdrawing the same. The Labour Court was required to address itself to all these documents produced by the respondent along with his statement of claim in light of the alternative objection raised by the petitioner Company that respondent was not terminated but he had resigned voluntarily, and recorded its clear findings thereon. 21. Assuming, for the sake of examining the submission, that in absence of any oral evidence and in absence of unchallenged testimony of respondent before Labour Court as after filing Written