1 wp-1428-2011.sxw IN THE HIGH COURT OF JUDICATURE AT BOMBAY srj CIVIL APPELLATE JURISDICTION WRIT PETITION NO.1428 OF 2011 M/s. Advani Oerlikon Limited ] (now known as M/s. Ador Welding Ltd.) ] A Company incorporated under the ] Companies Act, having its factory at ] Chinchwad, Pune- 19. ] .. Petitioner V/s. Mr. Murlidhar Bhikoba Salunkhe ] residing at Salunkhe Chawl, ] Kalimata Mandir, Mohan Nagar, ] Chinchwad, Pune – 19. ] .. Respondent WITH WRIT PETITION NO. 1402 OF 2011 M/s. Advani Oerlikon Limited ] (now known as M/s. Ador Welding Ltd.) ] A Company incorporated under the ] Companies Act, having its factory at ] Chinchwad, Pune- 19. ] .. Petitioner V/s. Mr. Ankush Waman Bhosale ] residing at Room No.4/301, ] Panchawati Society, Sharadnagar, ] Chikali, Pune. ] .. Respondent 2 wp-1428-2011.sxw WITH WRIT PETITION NO.1403 OF 2011 M/s. Advani Oerlikon Limited ] (now known as M/s. Ador Welding Ltd.) ] A Company incorporated under the ] Companies Act, having its factory at ] Chinchwad, Pune- 19. ] .. Petitioner V/s. Mr. Pradeep Prabhakar Choudhari ] residing at Ramnagar, Behind Ekta Niwas ] Dharewal Chawl, Chinchewad, Pune 19. ] .. Respondent. WITH WRIT PETITION NO.1426 OF 2011 M/s. Advani Oerlikon Limited ] (now known as M/s. Ador Welding Ltd.) ] A Company incorporated under the ] Companies Act, having its factory at ] Chinchwad, Pune- 19. ] .. Petitioner V/s. Mr. Ankush Thoraji Pawar ] residing at 17/4, Mangal Nagar, ] Opposite Pitale Milk Dairy, ] Wakade Road, Thergaon, Pune 33. ] .. Respondent WITH WRIT PETITION NO.1427 OF 2011 M/s. Advani Oerlikon Limited ] (now known as M/s. Ador Welding Ltd.) ] A Company incorporated under the ] Companies Act, having its factory at ] Chinchwad, Pune- 19. ] .. Petitioner 3 wp-1428-2011.sxw V/s. Gulab Rajaram Kalbhor ] residing at Kalbhornagar, ] Opp: David Brown, Chinchwad, Pune 19. ] .. Respondent. Mr. K.S. Bapat i/b. M/s. Desai and Desai Associates, for the Petitioner. Mr. J. S. Deo, for the Respondent. CORAM : K.K.TATED, J. RESERVED ON : 9th AUGUST, 2011. PRONOUNCED ON: 12th AUGUST, 2011. JUDGMENT: 1 Heard the learned counsel for the Parties. 2 Rule. Rule made returnable forthwith. 3 By consent, matters are taken on board for final hearing at the stage of admission itself. 4 By these Petitions under Articles 226 & 227 of the Constitution of India, the Petitioner-Original First Party challenges the order dated 18th June, 2010 passed by the learned Presiding Officer, Second Labour Court, Pune in Reference (IDA) Nos. 280 to 284 of 2003, directing Petitioner to reinstate the Respondent- Second Party on their original post with continuity of service and pay them full back wages with effect from 16th 4 wp-1428-2011.sxw September, 2002. 5 A few facts of the matter are as under:- The Petitioner by its letter dated 16th September, 2002 terminated the service of Respondent by adhering to the provisions of Section 25F and 25G of the Industrial Disputes Act, 1947 (herein after referred to as “the said Act”). Since the Respondent did not accept the retrenchment compensation, the Petitioner sent the same by RPAD and the same was duly accepted and the cheque was duly encashed by the Respondent. Thereafter, the Petitioner in accordance with Rule 80 of the Industrial Disputes (Bombay) Rules, by its letter dated 19th September, 2002 communicated the decision of retrenchment to all the concerned authorities. Thereafter, the Respondent- Original Second Party raised an industrial dispute and the matter was carried in conciliation before the conciliation officer. As the settlement did not take place between the parties, the government referred the matter for adjudication to the Labour Court being Reference (IDA) No. 280 of 2003. Thereafter, the Respondent filed their statement of claim, contending inter alia that his services were terminated, as he joined Bharatiya Kamgar Karmachari Mahasangh, which was not liked by the Management. It was also contended in their statement of claim that their services were terminated without following the due 5 wp-1428-2011.sxw process of law as per the provisions of the Industrial Disputes Act, 1947. In the said statement of claim, the Petitioner filed its Written Statement, pointing out that the services of the Respondent were terminated by following the principles as contemplated under Section 25F and 25G of the said Act and, therefore, the termination was completely legal and bona fide. The Petitioner in their Written Statement denied any victimization of the Respondent as alleged. The Petitioner as well as the Respondent examined their witnesses in support their cases. After hearing both the sides, the learned Presiding Officer, Second Labour Court, Pune passed the impugned Award dated 18th June, 2010, directing Petitioner to reinstate the Respondent on their original post with continuity of service and pay them full back wages with effect from 16th September, 2002. Hence, present Petition. 6 The learned counsel appearing for the Petitioner- Original First Party submits that the impugned Award dated 18th June, 2010 passed by the learned Presiding Officer, Second Labour Court, Pune is against justice, equity and good conscience and the same is liable to be set aside. He submits that due to recession, there was no sufficient work available for the employees in the Petitioner Company and, hence, the Petitioner decided to terminate the service of the Respondent by way of retrenchment. For that purpose, the Petitioner on 2nd September, 2002 published seniority list on 6 wp-1428-2011.sxw the notice board. After following due process of law, the Petitioner issued letter dated 16th September, 2002 to the Respondent and thereby terminated their services by following the provisions of Section 25F and 25G of the said Act. He submits that when Respondent refused to accept the compensation as offered in their retrenchment letter dated 16th September, 2002 they forwarded the entire compensation to each Respondent by RPAD. The same was duly received by the Respondent and they encashed the same. He further submits that as required by law under Rule 80 of Industrial Dispute (Bombay) Rules, they immediately intimated the retrenchment of Respondent- Original Second Party to the Government. He submits that though they followed the rules and regulations prescribed by the said Act, the learned Member of Labour Court erred in coming to the conclusion that Petitioner illegally retrenched the Respondent's services with effect from 16th September, 2002. The learned counsel appearing for the Petitioner submits that the Labour Court have committed error in coming to the conclusion that the Petitioner illegally retrenched the services of Respondent with effect from 16th September, 2002 mainly relying on the provisions of Rule 80 of the Industrial Dispute (Bombay) Rules. He submits that the Labour Court erred in coming to the conclusion that there was a violation of Rule 80 of the Industrial Dispute (Bombay) Rules without indicating as to how Rule 80 has been violated when the Government was intimated within three days after termination of the Respondent. He 7 wp-1428-2011.sxw submits that the Labour Court ought to have seen that Rule 80 is directory and not mandatory in nature and since there was complete compliance of Rule 80, the conclusion of the Labour Court is patently perverse. He submits that the Labour Court has erred in holding the termination to be illegal on the ground that retrenchment compensation was not paid prior to termination. Such a conclusion shows a complete non application of mind by the learned Labour Court as Section 25F does not contemplate payment of retrenchment compensation prior to termination of services whereas Section 25F contemplates payment of retrenchment compensation at the time of retrenchment. He submits that the learned Presiding Officer, Labour Court ought to have seen that once pre requisites of Sections 25F and 25G are followed and when the industry is not covered by Chapter VB of the said Act, there is no need to show any justification for retrenchment. On the basis of these submissions, the learned counsel appearing for the Petitioner submits that the impugned Award dated 18th June, 2010 passed by the learned Presiding Officer, Second Labour Court, Pune is against justice, equity and good conscience and the same is liable to be set aside. 7 On the other hand, the learned counsel appearing for the Respondent- Second Party vehemently opposed the present Petition. He submits that the Labour Court rightly held that the Petitioner – Original First Party without considering the provisions of the said Act and Rules, 8 wp-1428-2011.sxw framed there under, terminated the Respondent's service and, therefore, same is illegal. He submits that as per Section 25F of the said Act, it is mandatory on the part of company to pay retrenchment compensation first and then terminate the employees service. He submits that in the present case, the Petitioner without paying any compensation as required by Section 25F of the said Act, terminated Respondent's services and, therefore, the Labour Court rightly held that the Petitioner illegally terminated the Respondent's services. He further submits that as per Section 80 of the said Rules, it is mandatory on the part of employer before terminating / retrenching the service of employees to intimate his intention of termination/ retrenchment of any employee from his company to the Government. Admittedly, in the present case, the Petitioner issued retrenchment/ termination letter dated 16th September, 2002 to the Respondent and by letter dated 19th September, 2002, in form XXIV (under Rule 80), they informed the Secretary to the Government of Maharashtra (Industries and Labour Department), Mantralaya about the action taken by them under Section 25F of the said Act, terminating the Respondent's services. Therefore, the learned Presiding Officer, Second Labour Court rightly held that the Petitioner failed to comply with the Rule 80 of the said Act. He further submits that the learned Presiding Officer, Second Labour Court, Pune, rightly held that as per Rule 80 of the said Rule, a duty is cast upon the employer before terminating the services of 9 wp-1428-2011.sxw employee under Section 25F, to intimate in advance to the Government about their intention. Therefore, the learned Presiding Officer, Second Labour Court, Pune rightly held that the Petitioner after terminating the services of Respondent- employee under Section 25F intimated to the State Government as required under Rule 80 of the said Rules. He further submits that the learned Presiding Officer of Second Labour Court rightly held that compliance of Rule 80 of the said Rules is mandatory and not directory and if, mandatory provisions are not complied with the action taken by the employer is bad in law. On the basis of these facts, the learned Presiding Officer of Second Labour Court, Pune rightly held that the Petitioner without complying with the mandatory provisions of law, terminated the Respondent's services under Section 25F of the said Act and, therefore, Respondents are entitled for reinstatement in service and full back wages. On the basis of these submissions, the learned counsel appearing for the Respondent states that there is no substance in the present Petition and the same is liable to be dismissed with costs. 8 I heard both the counsel at length. I perused copy of impugned common Award dated 18th June, 2010 passed by the learned Presiding Officer, Second Labour Court, Pune, retrenchment letter dated 16th September, 2002, letter dated 19th September, 2002 written by Petitioner to the Secretary to the Government of Maharashtra as per provisions of Rule 10 wp-1428-2011.sxw 80, copy of statement of claim filed by the Respondent, Written Statements filed by the Petitioner and the affidavit of evidence of witness on behalf of the Petitioner as well as Respondent. For the purpose of deciding this Petition, it is necessary to reproduce Sections 25F and 25G of the said Act and Section 80 of the Industrial Dispute (Bombay) Rules which are as under:- “25-F- Conditions precedent to retrenchment of workmen- No workman employed in any industry who has been in continuous service for not less than one year under an employer shall be retrenched by that employer until- (a) the workman has been given one month's notice in writing indicating the reasons for retrenchment and the period of notice has expired, or the workman has been paid in lieu of such notice, wages for the period of the notice; (b) the workman has been paid, at the time of retrenchment, compensation which shall be equivalent to fifteen days' average pay [for every completed year of continuous service or any part thereof in excess of six months; and (c) notice in the prescribed manner is served on the appropriate Government [or such authority as may be specified by the appropriate Government by notification in the Official Gazette.] “25-G- Procedure for retrenchment - Where any workman in an industrial establishment, who is a citizen of India, is to be retrenched and he belongs to a particular category of workmen in that establishment, in the absence of any agreement between the employer and the workman in this behalf, the employer shall ordinarily retrench the workman who was the last persons to be employed in that category, unless for reasons to be recorded the employer retrenches any other workman. “80- Notice of retrenchment- (1) The notice referred to in clause (c) of Section 25-F shall be given in Form XXIV by an 11 wp-1428-2011.sxw employer and be served either by personal service or by registered post, on the secretary to the Government of Maharashtra, Industries and Labour Department, Bombay - (i) not less than twenty one days before the date of retrenchment, if the notice of retrenchment has been given to a workman; (ii) within seven days of the date of retrenchment if no such notice has been given but the workman is paid wages in lieu of notice; (iii)(a) at least one month before the date of termination of service if such date is specified in an agreement where the retrenchment is carried out under an agreement; and (b) on the date of such agreement, where the date of termination is not so specified. (2) A copy of such notice shall be sent by the employer to the Commissioner of Labour, Bombay and the Deputy Commissioner of Labour of the area concerned, namely Deputy Commissioner of Labour (Administration), Bombay/ Deputy Commissioner of Labour, Poona/Deputy Commissioner of Labour, Nagpur. 9 Bare reading of the Section 25F shows that the Company/ Employer can retrench the workmen who have been in continuous service for not less than one year by giving one month's notice in writing indicating the reasons for retrenchment or by paying one month wages/ salary in lieu of such notice. In the present case, the Petitioner- Employer has prepared the seniority list and same was published on notice board on 2nd September, 2006. Thereafter, by their letter dated 16th September, 2002 terminated the service of Respondent. In the said letter, Petitioner submits that due to recession, there is no sufficient work available in their Company for the Respondent- employee concerned and, hence, they decided to terminate the services of the Respondent by way of retrenchment. In the 12 wp-1428-2011.sxw said letter, Petitioner has specifically given the calculation of salary for the balance leave, one month salary in lieu of notice and 15 days salary for competed one year service. They specifically stated in the letter that cheque of all these calculations was enclosed along with their letter. Bare reading of the letter dated 16th September, 2002 i.e. termination letter issued by the Petitioner shows that they complied with the provisions of Section 25F of the said Act. 10 The learned Presiding Officer, Second Labour Court, Pune mainly relied on Rule 80 of the Industrial Dispute (Bombay), 1957. The Labour Court held that the Petitioner terminated the Respondent's services by letter dated 16th September, 2002 and thereafter, they forwarded the notice as required under Rule 80 of the said Rules on 19th September, 2002 to the Government. It means three days later of action of retrenchment, Government was informed as per Rule 80. Therefore, it is contravention of Sub-Rule (i) of Rule 80 of Industrial Disputes (Bombay) Rules, 1957. Therefore, the action of termination cannot be said to be legal. The bare reading of Rule 80 of the said Rules, shows that it is not mandatory that before issuing termination letter, the Employer must intimate to the Government. For this proposition, the Petitioner relied on the judgment in the matter of Bombay Union of Journalists v/s. State of Bombay and another, reported in AIR 1964- Supreme Court 1617. In that authority, the 13 wp-1428-2011.sxw Apex Court held that Rule framed by the State of Bombay under the Act indicates that the Government has constituted to provisions of Section 25F (c) as being directory and not as constituting a condition precedent for the validity of retrenchment under Section 25F. Rule 80 of the said Rules clearly shows that where the employer has retrenched the employee by offering to pay him the requisite amount of remuneration in lieu of notice prescribed by Section 25F (a), the employer is required to serve the notice of the said retrenchment and that means that in such a case, the notice has not to be served on the Government before retrenchment is effected. In other words, Rule 80, does not treat the notice prescribed by Section 25F(c) as condition precedent. Paragraph 7 of that judgment read thus:- “Para-7:- Mr. Bishan Narain has then urged that the main point of controversy between the parties was in regard to the failure of respondent No.2 to comply with the provisions of S. 25-F(c) of the Act and that has not been considered by respondent No.1 while refusing to make a reference in the present case. Section 25F (c) provides that no workman to which the said provision applies shall be retrenched by the employer, until notice in the prescribed manner is served on the appropriate Government. It is common ground that notice had not been served by respondent No.2 on respondent No.1 as required by S. 25F(c)- prior to the termination of services of appellants 2 and 3, and the argument is that the reasons mentioned by respondent No.1 in its communication to appellant No.1 indicating its refusal to make a reference, show that this aspect of the matter has not been considered by respondent No.1 and that, it is urged, introduces a serious infirmity in the said reasons and calls for a writ of mandamus requiring respondent No.1 to rectify the said omission. There is no substance in this argument. It appears that the Rules framed by respondent No.1 under the Act indicate that 14 wp-1428-2011.sxw respondent No.1 has construed the provisions of S.25F(c) as being directory and not as constituting a condition precedent for the validity of retrenchment under S.25F. Rule 80 of the said Rules clearly shows that where the employer has retrenched the employees by offering to pay him the requisite amount of remuneration in lieu of notice prescribed by S. 25F(a), the employer is required to serve the notice of the said retrenchment within seven days of the date of retrenchment and that means that in such a case, the notice has not to be served on the Government before retrenchment is effected. In other words, R.80, it is conceded, treats the notice prescribed by S.25F(c) as condition subsequent and not a condition precedent. In view of the rule framed by itself respondent No.1 must not have thought it necessary to make any reference to the argument urged by the appellants that respondent No.2's failure to serve a notice on respondent No.1 before retrenchment was effected introduced an infirmity in the order of retrenchment. Rule 80 framed by respondent No.1 was itself an answer to the said plea, and so, respondent No.1 may well have thought that it was unnecessary to give that reason in its communication to the appellants.” 11 Therefore, considering the Rule 80 of the said Rules and above mentioned authority, it is crystal clear that issuance of notice under section 80 in advance of thirty days is not mandatory. Employer can issue notice under Section 80 after terminating the services of employee within seven days also. Therefore, in the present case, the Petitioner by their letter dated 16th September, 2002, terminated the Respondent's service and, thereafter, immediately by letter dated 19th September, 2002, under Rule 80 of the said Rules intimated to the Government of Maharashtra. 12 Therefore, in my view, the learned Presiding Officer of Second Labour Court, Pune erred in coming to the conclusion that the Petitioner 15 wp-1428-2011.sxw contravened the provisions of Sub-Clause 1 of Rule 80 of the Industrial Disputes (Bombay) Rules, 1957 and thereby the action of termination cannot be said to be legal. In respect of the contentions raised by the learned counsel appearing for the Respondent that the Petitioner has not indicated any reason in their letter for retrenchment, it is specifically stated in termination letter dated 16th September, 2002 that due to recession, there was no sufficient work available for the employee concerned. Hence they decided to terminate and those facts are also proved by the Petitioner's witness Shri Sunil Bhoir, General Manager. 13 On the above mentioned facts and circumstances, it is crystal clear that the Petitioner followed the provisions of Section 25F and 25G of the said Act and Rule 80 of the Industrial Disputes (Bombay) Rules, 1957 at the time of terminating the Respondent's services. Therefore, the common impugned award dated 18th June, 2010 passed by the Presiding Officer, Second Labour Court, Pune in Reference (IDA) No. 280 to 284 of 2003 is not sustainable in law and the same is set aside. The Petitions are allowed in terms of prayer clause (a) which reads as under:- “(a):- that this Hon'ble Court be pleased to issue a writ of certiorari or any other appropriate writ, order or direction in the nature of certiorari thereby quashing and/or setting aside the impugned Judgment & Award dated 18th June, 2010 passed by the Presiding Officer, 2nd Labour Court, Pune in Reference (IDA) No.280 to 284 of 2003.” 16 wp-1428-2011.sxw 14 Considering the facts and circumstances of the present case, no order as to costs. (K.K.TATED, J.)