IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH Civil Writ Petition No.13171 of 1996 Date of decision: 23 .07.2009 S.R.Sharma ...Petitioner versus M/s Hamco Industries (P) Limited Maksudan, Jalandhar ...Respondents and another CORAM: HON'BLE MR. JUSTICE K.KANNAN Present: Ms. Deepinder Kaur, Advocate, for Mr. Vikas Singh, Advocate, for the petitioner. Mr. Amit Jain, Advocate, for respondent No.1. --- 1. Whether reporters of local papers may be allowed to see the judgment ? Yes. 2. To be referred to the reporters or not ? Yes. 3. Whether the judgment should be reported in the digest ? Yes. K.Kannan, J. (Oral) 1. The award which is impugned is rejection of a reference to adjudicate on whether the termination of services of the workman was justified or not. The Labour Court while considering the defence examined the aspect whether the workman was working in a supervisory capacity and whether he came within the definition of 'workman'. The Labour Court found that the claimant to be a 'workman' and further held that the allegation of the management that the claimant had abandoned his services was not established. On the issue whether the termination was justified or not, the Court found that there had been no valid termination. Civil Writ Petition No.13171 of 1996 - 2 - 2. The Labour Court still found that it was not necessary to direct reinstatement and on the basis of evidence adduced on behalf of the management held that the petitioner had been gainfully employed with M/s Aditya Enterprises, a firm that was managed by one Sham Lal, brother of Om Parkash who was enmically disposed of with Sham Lal. Sham Lal was incidentally the Managing Director of the respondent- firm. The Court also examined the evidence about the salary that he would have drawn and although, it had appointed a Commissioner to verify the salary that was being paid to the workman from M/s Aditya Enterprises, held that the finding of the Commissioner that he was being paid only Rs.150/- could not be true. On a more substantial point namely, whether the reference to the Labour Court had been appropriate and valid, it held that there had been no notice by the Government before the reference was made and consequently, the reference itself was bad. This finding became necessary in view of a direction that had been given by this Hon'ble Court in Writ Petition No.112 of 1989 between the same parties. While in earlier round of litigation, the Labour Court had directed reinstatement and the point that was urged before this Court in the writ petition referred to above was that the Government had originally rejected the reference but suo moto reviewed its decision and made a reference subsequently, this Court set aside the earlier order passed by the Labour Court between the same parties and remanded the matter with a direction that the Labour Court to ascertain as to whether any opportunity was given to the Company before making the second reference. Civil Writ Petition No.13171 of 1996 - 3 - 3. It is admitted by both sides that after the first demand notice issued by the workman complaining of his termination as unlawful, the Government had originally rejected the reference but suo moto reviewed its decision. The point whether the reference would become bad if notice was not issued to the employer was examined by this Hon'ble Court in the earlier writ petition in the light of law laid down through certain decisions and particularly, the decision in M/s Escorts Limited Versus Industrial Tribunal, Haryana-1983 Lab.I.C.223 and M/s Avon Services Production Agencies (P) Ltd. Versus Industrial Tribunal, Harana and others-1979 SC 170. It had also referred to other decisions in Mohinder Singh Gill Versus Chief Election Commissioner-AIR 1978 SC 851 and Shrimati Maneka Gandhi Versus Union of India-AIR 1978 SC 597, that dealt with the issues of natural justice in the light right to hearing before any administrative or quasi judicial decision was taken. The learned counsel appearing for the petitioner would urge that it was inconsequential that no notice was given to the employer before the reference was made and even if there was such lapse it was not fundamental as to vitiate the enquiry before the Labour Court itself. The matter was dealt with in another Division Bench of this Court in Ved Ram Versus The Presiding Officer, Labour Court-II, Faridabad-1997 (1) SCT 133, that held that Government was not required to afford opportunity of hearing to the employer or the employee at the time of making or declining to make a reference at the first time or the second time after declining to make a reference on an earlier demand for reference to the Labour Court. While Civil Writ Petition No.13171 of 1996 - 4 - so holding, the Bench of this Court had relied on a decision of the Hon'ble Supreme Court in Sultan Singh Versus State of Haryana and another-1996 (2) SCC 66. In Sultan Singh's case, the Hon'ble Supreme Court held as under :- “The need for hearing is obviated, if it is considered on second occasion as even then if it makes reference, it does not cease to be an administrative order and so is not incumbent upon the State Government to record reasons therein. Therefore, it is not necessary to issue notice to the employer not to consider his objections nor to hear him before making a reference. Accordingly, we are of the view that the High Court was wholly wrong in its conclusion that before making reference on second application it was incumbent upon the State Government to given notice to the employer and to give an opportunity to the employer and record reasons for making reference. The previous decision of that Court relied on in the case at hand was wrongly decided.” 4. This decision of the Hon'ble Supreme Court had come about subsequently to the order passed by the Bench in the year 1991. The distinction which the learned counsel appearing for the management sought to make was that the second reference in that case (before the Hon'ble Supreme Court) had been made by a demand notice again and the reference had been made without notice but in this case there had been no second demand notice, but the Government was making a reference on its own. I do not think that this distinction has any meaning for the issue whether a reference made without notice is valid or not. If the second reference cannot be vitiated by the only fact that notice had Civil Writ Petition No.13171 of 1996 - 5 - not been sent to the employer, it would indeed be irrelevant that such reference came after a fresh demand notice had been made or not. I therefore find that the decision in Sultan's case holds the field that reference cannot be vitiated by the only fact that prior notice had not been sent to the employer. If at all, it was an error of procedure and specific hardship must be shown by the management petitioner by the failure of reference. The dispute whether the termination was bad or not, was an issue which was unresolved and therefore, no prejudice could be said to have been caused by the reference made by the Government. 5. Even while holding that the termination was bad, the Labour Court did not order reinstatement on the ground that he was gainfully employed. It was indeed a matter of admission by the workman himself that he had been employed with M/s Aditya Enterprises. It was brought out through evidence that the Managing Director of the respondent firm and the Managing Director of the firm in which the workman was employed subsequently were enmically disposed of and the problem started only when an imputation was made against the workman that he had been passing the secrets to his brother. Though it was not a matter which the workman was prepared to concede, it was definitely a matter that would show that an accountant who occupied a position of trust for the employer had lost the confidence of the employer. Even apart from the fact that the workman had been gainfully employed, it was a case where there had been loss of confidence of the employer and it would have been unworkable to direct reinstatement. Civil Writ Petition No.13171 of 1996 - 6 - 6. The termination of services was of the year 1982 and both on occasions before remand and after remand, the findings have been that the termination was bad. The workman has been litigating all long without any monetary benefit of securing employment. There has been a finding that the workman was gainfully employed but it was also a finding which the Labour Court invited upon itself by appointing a Commissioner that he was earning only Rs.150 per month. 7. Taking into consideration the totality of the circumstances, I am of the view that the workman is not entitled to reinstatement and the appropriate compensation would be Rs.One lac, which shall be payable to the workman within a period of eight weeks from the date when the copy of the order is made ready, failing which the amount shall bear simple interest @ 7.5% per annum. 8. The order of the Labour Court is modified to provide compensation as mentioned above and the writ petition is disposed of accordingly. (K.KANNAN) JUDGE 23.07.2009 sanjeev