IN THE HIGH COURT OF HIMACHAL PRADESH, SHIMLA. CWPs No.1140/2007 with 1141, 1142, 1143, 1144, 1145, 1146, 1147, 1153, 1154, 1155, 1156, 1157 and 1158 of 2007 Reserved on:11.4.2008 Decided on.7.5.2008 CWP No. 1140/2007 Phagu Pal and others. …Petitioners. Versus M/s Birla Textile and others …Respondents. CWP No. 1141/2007 Bharat Lal. …Petitioner. Versus M/s Birla Textile and others …Respondents. CWP No. 1142/2007 Bali Ram. …Petitioner. Versus M/s Birla Textile and others …Respondents. CWP No. 1143/2007 Kuldeep Singh. …Petitioner. Versus M/s Birla Textile and others …Respondents. CWP No. 1144/2007 Ram Palat. …Petitioner. Versus M/s Birla Textile and others …Respondents. CWP No. 1145/2007 Kalap Nath. …Petitioner. Versus M/s Birla Textile and others …Respondents. 2 CWP No. 1146/2007 Ram Swarat. …Petitioner. Versus M/s Birla Textile and others …Respondents. CWP No. 1147/2007 Surender Mehta. …Petitioner. Versus M/s Birla Textile and others …Respondents. CWP No. 1153/2007 Amar Nath. …Petitioner. Versus M/s Birla Textile and others …Respondents. CWP No. 1154/2007 Bali Ram. …Petitioner. Versus M/s Birla Textile and others …Respondents. CWP No. 1155/2007 Sudama Prasad. …Petitioner. Versus M/s Birla Textile and others …Respondents. CWP No. 1156/2007 Murari Lal. …Petitioner. Versus M/s Birla Textile and others …Respondents. CWP No. 1157/2007 Kanchan Singh. …Petitioner. Versus M/s Birla Textile and others …Respondents. CWP No. 1158/2007 Ganpat Ram. …Petitioner. Versus M/s Birla Textile and others …Respondents. 3 Coram The Hon’ble Mr. Justice Rajiv Sharma, J. Whether approved for reporting ?1. yes. For the petitioners : Mr. T.C. Gupta, Sr. Advocate with Mr. Rajesh Verma, Advocate. For the respondents : Mr.R.K. Jain, Sr. Advocate with Mr. Jagdish Thakur, Advocate for the respondents Rajiv Sharma, J. Since the common questions of law and fact are involved in these petitions, the same are being disposed by a common judgment. A challenge has been laid by the petitioners to the award dated 17.1.2006 passed in reference No. 129/2000 by the Presiding Judge, Himachal Pradesh Labour Court, Shimla. The brief facts necessary for the adjudications of these petitions are that the ‘Kapra Mazdoor Lal Jhanda Union’ (CITU), had submitted a Demand Charter to the Manager of the respondent- factory on 31.1.2000 raising as many as 15 demands. The Union had also served a notice on the management of the respondent- factory on 10.6.2000 under sections 22 and 23 of the Industrial Disputes Act, 1947. It appears that the matter could not be resolved amicably between the workmen and the management and consequently the State Government has made the following reference to the Labour Court: 1 Whether the reporters of Local Papers may be allowed to see the judgment? yes. 4 “Whether the demand raised by Kapra Mazdoor Lal Jhanda Union (CITU) (Unregistered) Birla Mills, Sai Road Baddi, District Solan, H.P. with the management of M/s Birla Textile Mills, Sai Road Baddi District Solan, H.P. vide their demand charter dated 10.6.2000 read with the demand charter dated 31.1.2000 (copies enclosed) are genuine and justified. If yes, which of their demands should be accepted and from which date? In sequel to the reference made by the State Government, the Union had filed its claim primarily contending therein that pursuant to the directions issued by the Hon’ble Supreme Court from time to time as many as 1841 workmen had joined their duties at Baddi and their terms and conditions of employment are required to be protected as per the directions issued by the Hon’ble Supreme Court in M.C. Mehta versus Union of India and others, (1996) 4 SCC 750, more particularly, para 28 (9) clauses (a) and (b) thereof. The further case as set out by the Union before the Labour Court was that the workmen were entitled to variable dearness allowance on the principle of 90% neutralization in accordance with Vaidya Lingam Award dated 23.11.1973 and the management could not make deductions from their wages. The management had contested the claim filed by the workmen primarily on the ground of maintainability of the reference and secondly on the ground that the Vaidya Lingam Award dated 23.11.1973 was applicable only to textile workers within the territorial jurisdiction of N.C.T. Delhi. The management had also pleaded that it was running into heavy losses and the workmen were being paid the same wages which they were 5 getting at the time of closure of the factory at Delhi. The Labour Court on the basis of the pleadings of the parties had framed the following issues: 1. Whether the reference is not maintainable in view of the preliminary objection raised by the respondents? OPR. 2. Whether the demand raised by the petitioners vide their demand charter dated 31.1.2000 is not justified? If so to what effect? OPP 3. Relief. The Labour Court had answered the reference against the workmen. Mr. T.C. Gupta, Sr. Advocate with Mr. Rajesh Verma, Advocate had strenuously argued that the award dated 17.1.2006 is not sustainable in the eyes of law. He also contended that the Labour Court had misconstrued and mis-interpreted the evidence led by parties leading to grave miscarriage of justice. Mr. R.K. Jain, Senior Advocate with Mr. Jagdish Tahkur, Advocate had supported the award dated 17.1.2006. He had reiterated the stand which has been taken by the management before the Labour Court. I have heard the learned counsel for the parties and perused the record carefully. The foundation of the demand charter dated 31.1.2000 read in conjunction with notice dated 10.6.2000 is the directions issued by the Hon’ble Supreme Court in case M.C. Mehta versus Union of India and others, (1996) 4 SCC 750. It will be apt at this stage to 6 reproduce relevant extract of para 28 whereby directions were issued to the respondents. The relevant extract of clauses (a) to (f) of sub-para (9) of para 28 reads thus: “28. (9) The workmen employed in the above mentioned 168 industries shall be entitled to the rights and benefits as indicated hereunder :- (a) The workmen shall have continuity of employment at the new town and place where the industry is shifted. The terms and conditions of their employment shall not be altered to their detriment; (b) The period between the closure of the industry in Delhi and its restart at the place of relocation shall be treated as active employment and the workmen shall be paid their full wages with continuity of service; (c) All those workmen who agree to shift with the industry shall be given one year’s wages as "shifting bonus" to help them settle at the new location". (d) The workmen employed in the industries which fail to relocate and the workmen who are not willing to shift along with the relocated industries, shall be deemed to have been retrenched with effect from November 30, 1996 provided they have been in continuous service (as defined in Section 25B of the Industrial Disputes Act, 1947) for not less than one year in the industries concerned before the said date. They shall be paid compensation in terms of Section 25-F (b) of the Industrial Disputes act, 1947. These workmen shall also be paid, in addition, one year wages as additional compensation; (e) The "shifting bonus" and the compensation payable to the workmen in terms of this judgment 7 shall be paid by the management before December 31, 1996. (f) The gratuity amount payable to any workmen shall be paid in addition.” The Hon’ble Supreme Court in M.C Mehta versus Union of India, (1997) 11 SCC 327 had modified direction No. 9 (d) to the following effect: “Any way, this is a matter which concerns the industries. Keeping in view all the facts and circumstances of this case, we are of the view that the interest of the workmen would be met if we substitute the words "one year's wages" in the last line of Direction 9(d) quoted above with "six years' wages". The net result would be that the workmen referred to in Direction 9(d) shall be paid in addition, six years' wages as additional compensation in place of one year's wages as initially directed by us.” In sequel to the directions issued by the Hon’ble Supreme Court on 8.7.1996, the workmen were supposed to join their duties at Baddi. Since the workmen were not being permitted to join their duties at their new place of posting pursuant to order dated 8th July, 1996, the workmen approached the Hon’ble Supreme Court again by way of Contempt Petition No.532/97 in I.A. No. 22 and 36 in W.P. (C) No. 4677/1985 praying for the following reliefs: “(i) payment of full back wages w.e.f. 1/12/1996 along with 18% interest, (ii) to treat the workmen as in continuous employment for 1/12/1996, (iii) to direct the Industry to deem that the workmen have exercised option to shift in accordance with the 8 order of this Hon'ble court, (iv) to direct the Industry to give I year's wages as shifting bonus, (v) to direct the Industry to ask the workmen to report at the selection sites after the factory is fully set up and commenced production, with basic amenities for the workers and their families.” The Hon’ble Supreme Court formulated two points for consideration, which read thus: “(I) Whether the management was right in its submissions that the workmen, though given opportunity in various letters to give their option for reporting at Baddi, failed to exercise option and must be deemed to have been retrenched on 30/11/1996 in terms of the orders dated 8/7/19961 and 30/12/1996 of this court ? (II) Whether the workmen were right in contending that the management had no right to seek options from the workmen even before the Industry was relocated and started functioning at Baddi ? These two points reflect the rival contentions and can be disposed of together.” Their Lordships of the Hon’ble Supreme Court after taking into consideration clauses (a) and (b) of sub-para (9) of para 28 held that the terms and conditions of employment of the workmen could not be altered to their detriment. In other words, the employees were deemed to be in active employment right from the date of “closure” of the industry at Delhi and its “re-start” at the place of relocation and they had to be paid full wages with continuity in service for the said period in addition to one year’s wages towards shifting bonus. It 9 was also brought to the notice of the Hon’ble Supreme Court by Ms. Indira Jaisingh and Mr. D.K. Agarwal, Senior Advocates appearing on behalf of the workmen that the workmen should be paid the same wages as were being paid at Delhi since the minimum wages payable in Himachal Pradesh to the locals were less. The contention of the learned counsel appearing on behalf of the management raised on the basis of clauses (c), (d) and (e) that if the workman did not exercise the option by 31st December, 1996, they were deemed to be retrenched with effect from 31st December, 1996 was repelled. This order was passed by the Hon’ble Supreme Court on 18.12.1998 reported in M.C. Mehta versus Union of India and others, JT 1998 (9) 103. The workmen were again constrained to approach the Hon’ble Supreme Court since they were not permitted to join their duties at the new place at Baddi for the simple reason that the factory had not become functional. When this fact was brought to the notice of the Hon’ble Supreme Court, their Lordships were pleased to issue necessary directions to facilitate the joining by the workmen at the new place i.e. Baddi vide order dated 24.3.1999 reported in Workmen of M/s Birla Textiles versus K.K. Birla and others, 1999 (3) SCC 475. It is in this backdrop that the present petition is to be adjudicated upon. The workmen had primarily relied upon as noticed above on clauses (a) and (b) of sub-para (9) of para 28 of the judgment reported in (1996) 4 SC 750 to substantiate their plea before the Labour Court that the terms and conditions of their 10 employment could not be altered to their detriment and they are to be treated in continuous employment at the new place of posting i.e. Baddi. The union had produced three witnesses before the Labour Court in support of its pleas, more particularly, with regard to the payment of variable dearness allowance on the basis of Vaidya Lingam Award dated 23.11.1973 (Ex.P-6). PW-1 Rama Kant has placed on record copy of the award dated 23.11.1973. He has stated that he was authorized by the workmen to raise the industrial dispute for the redressal of the grievance of the members of the Union. He has stated before the Labour Court that when the workmen were working at Delhi, they were provided holidays during Holi, Diwali, Janamashtami which were stopped at Baddi. He has categorically stated that the workmen were getting the dearness allowance as per the Vaidya Lingam Award. However, he has stated that the Union was not registered, but they had taken steps for its registration in the months of August or September, 1999. He has further stated that he is the General Secretary of the Union since August 1999 and the members of the Union are paying Rs. 10/- per month as subscription. He has further stated that the Vaidya Lingam Award was not made applicable to the textile mills out side Delhi. He has also admitted that the other textile mills at Baddi are not paying dearness allowance. PW-2, Sh. Ram Vilas and PW-3 had supported the version of PW-1. They had stated that after 1996, the dearness allowance 11 was not being paid to the workmen and the same is required to be paid as per the Vaidya Lingam Award. The management has produced four witnesses. RW-1 Sh. K.M. Rathi has also filed his affidavit Ex.RW-1/A supporting the contents of the reply. He has stated that the factory was running in losses. RW-2 Sh. Vibhor Gupta has tendered his affidavit Ex. RW-2/A. He has admitted in his cross-examination that the workmen working at Delhi had joined at Baddi. RW-3 Sh. K.K. Sharma has tendered his affidavit Ex.RW-3/A. He has supported the stand of the management taken before the Labour Court in its reply. RW-4 Sh. A.K. Sinha is the most material witness, who was working as a Senior Manager (P&A) and has tendered his affidavit Ex.RW-4/A. He has admitted that the workmen were getting the dearness allowance as per the consumer price index at Delhi recommended by the Vaidya Lingam in the form of Award and the mill was shifted to Baddi as per the directions of the Hon’ble Supreme Court on the same terms and conditions as applicable to the workers in Delhi. He has further admitted that the workmen are getting Rs. 1224/- per month less due to non-payment of dearness allowance. The learned counsel appearing on behalf of the Union had restricted his arguments only to demands No. 1, 2 and 10 before the Labour Court. The Labour Court came to the conclusion that since Vaidya Lingam Award was applicable to the textile workers at Delhi, it could not be made applicable to the workers employed at Badi in Himachal Pradesh. The Labour Court had not discussed the 12 evidence at all before coming to an abrupt conclusion that the workers were not entitled to dearness allowance at Baddi. The Labour Court should have discussed the evidence led by the workmen as well as by the management and thereafter a specific finding was to be recorded. The Labour Court had missed a very vital aspect in the matter i.e. the directions issued by the Hon’ble Supreme Court on 8th July, 1996 in M.C. Mehta versus Union of India and others (1996) 4 SCC 750 whereby there ought to have been continuity in the employment of the workmen at the new place of posting and their terms and conditions of employment could not be altered to their detriment. If the workmen were getting the dearness allowance on the basis of the Vaidya Lingam Award dated 23.11.1973 which has become the integral part of the terms and conditions, the same could not be denied by the management. PW- 1 has placed on record copy of award of Vaidya Lingam dated 23.11.1973. PW-1 Sh. Rama Kant has stated that the workmen were getting the dearness allowance at Delhi and this version has been duly supported by PW-2 and PW-3 respectively. The representative of the management RW-4 Sh. A.K. Sinha, Senior Manager (P&A) in categorical terms had admitted that the workmen were getting the dearness allowance as per the award of the Vaidya Lingam dated 23.11.1973 and presently the workmen are getting less pay amounting to Rs. 1224/- per month. He has also admitted that the workmen were entitled to protection of the terms and conditions of their employment as applicable in Delhi at the new place of posting i.e. Baddi. The emphasis of the directions issued by 13 the Hon’ble Supreme Court in clause (a) of sub-para (9) of para 28 was that the workmen shall have continuity of employment at the new town and place where the industry was to be shifted and the terms and conditions of their employment could not be altered to their detriment. To get the variable dearness allowance as per the Vaidya Lingam Award was the integral part of the terms and conditions of employment of the workmen as discussed hereinabove. The matter can be viewed from another angle. True it may be that the Vaidya Lingam Award was made applicable to the workmen working within the territorial jurisdiction of NCT Delhi, however, it was never visualized at that time that the workmen who were working in Delhi were to be relocated. Since the industries were relocated outside the territorial jurisdiction of NCT Delhi, their terms and conditions of employment had been protected by the Hon’ble Supreme Court. The recommendations made in the award dated 23.11.1973 for the release of variable dearness allowance will be deemed to be ifso facto applicable to the workmen who were initially working in Delhi and thereafter posted at Baddi. The workmen could not be put to disadvantageous position as has been held by the Labour Court only on the ground that the Vaidya Lingam Award was only applicable to the textile workers at Delhi. Whatever wages were being paid to the workmen at Delhi, were to be paid to them when they were relocated and joined their duties at Baddi. It is evident from the judgments/orders reproduced hereinabove that the management had also tried to defeat the legal rights of the workmen 14 by coercing them to give their option. Their Lordships of the Hon’ble Supreme Court while repelling the contention of the management by harmoniously construing clauses (a) and (b) of sub-para (9) of para 28 have held in JT 1998 (9) SC 104 that the management was to ensure that the workers join their new place of posting and their salaries/wages are protected. The management had not facilitated the process of joining of the workmen as noticed by the Hon’ble Supreme Court in case Workmen of M/s Birla Textiles versus K.K. Birla and others, (1999) 3 SCC 475 dated 24th March, 1999. Since this Court has held that the petitioners are entitled to get variable dearness allowance, which they were getting at Delhi at a new place of posting i.e. Baddi, a fortiori, they are also entitled to same number of holidays/paid holidays. The respondents could not make deductions from the wages of the petitioners by invoking section 9 of the Payment of Wages Act, 1936. This will amount to changing the terms and conditions of the workmen which have been specifically protected by the Hon’ble Supreme Court. The petitioners are also entitled to same number of holidays of Janamasthmi, Holi etc. which they were getting at Delhi. The Labour Court had not taken into consideration the judgment of the Hon’ble Supreme Court whereby the terms and conditions of the workmen are to be protected qua paid holidays. It is declared that the petitioners’ wages could not be deducted of paid holidays by the management. The Labour Court besides dismissing the case of the workmen on merits had also held that the reference was not maintainable since the same was neither espoused by the registered Trade Union 15 nor the Union had been duly authorized by the workers. Suffice it to say that the demand of all the workmen in fact was for the implementation of the judgments/orders passed by the Hon’ble Supreme Court from time to time, more particularly clause (a) of sub para (9) of para 28 dated 8th July, 1996 read with other orders as noticed hereinabove. It is settled law by now that it is not necessary that for espousal of the grievance of the members by the Union, it should be registered. Their Lordships of the Hon’ble Supreme Court have held in Newspapers Ltd; Allahbad versus U.P. State Industrial Tribunal and others, AIR (47) 1960 SC 1328 that cause of workman can be taken up by unregistered association of workmen. Their Lordships have held as under: “Then it was urged that the association which sponsored the case of respondents 3 to 5 was an unregistered body and that made the reference invalid. Both the courts have held, and rightly, that it is not necessary that a registered body should sponsor a workman's case to make it an industrial dispute. Once it is shown that a body of workmen, either acting through their union or otherwise had sponsored a workman's case it becomes an industrial dispute.” Their Lordships of the Hon’ble Supreme Court have held in State of Bihar versus Kripa Shankar Jaiswal, AIR (48) 161 SC 304 that for a dispute to constitute an industrial dispute it is not a pre-requisite that it should be sponsored by a recognized union and 16 that all he workmen of an industrial establishment should be parties to it. Their Lordships have held as under: “It would be an erroneous view if it were said that for a dispute to constitute an industrial dispute it is a requisite condition that it should be sponsored by a recognised union or that all the workmen of an industrial establishment should be parties to it. A dispute becomes an industrial dispute even where it is sponsored by a union which is not registered as in the instant case or where the dispute raised is by some only of the workmen because in either case the matter falls within S. 18(3)(a) & (d) of the Act. See also Newspapers Ltd., Allahabad v. State Industrial Tribunal. Uttar Pradesh, (1960) 2 Lab LJ 37 at p. 38 : (AIR 1960 SC 1328 at p. 1329). The settlement of March 18, 1954, arrived at during the conciliation proceedings was signed by the Central Secretary and members of the executive committee of the Union though it was unregistered at the time. We cannot therefore give our accord to the decision that the settlement of march 18, 1954, was not a settlement binding between the parties.” Similarly, their Lordships of the Hon’ble Supreme Court in Pradip Lamp Works, Patna versus Workmen of Pradip Lamp Works, Patna and another, LLJ 1970 507 have held that dispute relating to the dismissal of 10 workmen espoused by union which was not registered but in which substantial number of workmen are members were held to be an industrial dispute. Their Lordships have held as under: “There is, thus clear evidence of these cases having been espoused by the new union or, being yet unregistered, by a substantial number of workmen. The fact that these cases were not taken up by the 17 recognized union does not mean that they were not industrial disputes. There are decisions of this Court which have laid down that espousal of a dispute before a reference is made even by a minority union, having a membership of substantial number of workmen, is sufficient to make such a dispute an industrial dispute. [See Workmen of Indian Express v. management (Civil Appeal No. 1733 of 1967, dated 26