IN THE HIGH COURT OF JUDICATURE, ANDHRA PRADESH AT HYDERABAD HON’BLE SRI JUSTICE A.GOPAL REDDY & HON'BLE SRI JUSTICE P. DURGA PRASAD WRIT APPEAL No.2517 of 2005 Date:08.12.2010 Between: The Kovur Co-operative Sugar Factory Limited, Nellore, rep. by its Managing Director, Nellore .....Appellant AND: P. Rajagopal and 14 others. ....Respondents. HON’BLE SRI JUSTICE A.GOPAL REDDY & HON'BLE SRI JUSTICE P. DURGA PRASAD WRIT APPEAL No.2517 of 2005 JUDGMENT (per Honourable Sri Justice A. Gopal Reddy) This is an appeal filed under Clause 15 of Letters Patent Act questioning the order passed in W.P.No.9933 of 2005 dated 23.11.2005 by the learned Single Judge of this Court directing the 3rd respondent-writ appellant herein to engage the petitioners as Security Guards, depending on the existence of work and that any other persons, either through the medium of Labour Contractor or otherwise, shall be engaged only after exhausting the claims of the retrenches NMRs, for re-engagement. Heard both sides. The facts which are not in dispute are stated thus: The petitioners herein along with others in all 281 NMRs are working under the 3rd respondent’s Sugar Factory and whose services were stopped with effect from 15.04.2005 by proceedings dated 04.04.2005 on the ground that the crushing operations of the Sugar Factory have not been taken up for 2 seasons i.e., from 2003- 2004 and 2004-2005, since the Government have not issued permission for crushing operations. In a decision reported in M. Krishnama Naidu v. State of Andhra Pradesh[1] wherein a Division Bench of this Court while upholding Section 12-A of the A.P. Cooperative Societies Act, 1964 (for short, the Act) directed the Registrar of the Company to provide opportunity to the Managing Committee of the Society before taking a decision to privatize the Cooperative Sugar Factories. But, however, while matters pending, the Government has taken steps to revive the sugar factories with effect from 2005-2006 crushing season, which have become financially sick and kept for privatization. While reviving the factories by the Government, instructions were issued with financial disciplines and also downsizing the employees through new staffing pattern, issued by National Cooperative Sugar Factories, New Delhi and recommended by the Commissioner. In this process, the Management offered the voluntary retirement scheme to the permanent and seasonal employees and to dispense with the services of NMRs. It is further ordered by the Government that as and when the services of NMRs required they are to be taken only on contract system basing on their qualification, experience and need. In the Joint Action Committee meeting held on 03.02.2005, it was agreed upon to give priority at the time of taking of NMRs on contract system to the deceased employees sons/daughter/wives as they are not been paid compensation by the Management. Questioning the same, the writ petitioners 13 in number filed the present writ petition contending that without issuing any notice to the petitioners and without following the procedure as contemplated under the Industrial Disputes Act and entered contract with Youth Employment Society with a malafide intention to dispense the services of the petitioners and issued proceedings dated 04.04.2005 stopping the services of 281 NMRs with effect from 15.04.2005 including the petitioner. Therefore, Management has not followed the procedure as contemplated under Industrial Disputes Act and decided to take a decision of stopping the services of the NMRs including the petitioner. A counter-affidavit is filed by the 3rd respondent-Management denying that the petitioners were subjected to interviews and were also appointed in regular post, that this respondent has not conducted any interviews to the NMRs worked in the factory including security NMRs and they never appointed in regular posts, and hence the petitioners are not entitled for regularization. It is further contended that out of 13 NMRs, the 3rd respondent enhanced wages on 16.12.1998 to two NMRs viz., P.Malakondaiah and Sk. Masthan at Rs.300/- per month. The 3rd respondent entrusted the security services of the factory on contract basis to youth employment society which was formed under the Chairmanship of District Collector, Superintendent of Police as Vice-Chairman, Additional Superintendent of Police as Convener at a contract amount of Rs.1,900/- per head of security guards. It is contended that the crushing operations of the factory have not been taken up for two seasons i.e., from 2003-2004 and 2004-2005, since the Government has not issued permission. The Government taken steps to revive the sugar factories with effect from 2005-2006 crushing season, which have become financially sick and kept for privatization. In the said connection, the Government has constituted a committee under the Chairmanship of Joint Collector, Cooperative Officer as a Member and the Managing Director as Member/Convener for reducing and downsizing of the employees/work force for making the factory financially viable. The Committee reviewed the strength of employees/workmen on the basis of productivity norms and as recommended by NFCSF and 121 permanent employees, 281 NMRs who were surplus have been discharged. It is specifically stated that the employees union of Joint Action Committee have agreed with the committee’s decision and singed in the proposals. The petitioners are members of the union/JAC and the decision agreed by the Joint Action Committee is binding on them. The Committee constituted under the Chairmanship of Joint Collector has decided and resolved to pay eligible benefits within two months from the date of relieving. The said decision was taken in the presence of workers union. The security NMRs/petitioners herein were also dispensed with along with other 268 NMRs. No reply has been filed contraverting the fact that the Union/Joint Action Committee has entered into with any agreement and the petitioners are the Members of the said Union/Joint Action Committee and have agreed with the decision of the Committee constituted for reducing and downsizing of the employees/work force for making the factory financially viable. Whether the Union/Joint Action Committee agreed with the Committee constituted under the Chairmanship of the Joint Collector and entered into an agreement is a question of fact and it can be resolved on raising an Industrial Dispute by the Labour Court and whether the said settlement is binding on the petitioners or not. The learned Single Judge of this Court without adverting to the agreement entered by the Union/Joint Action Committee for taking a decision of dispensing the services of the petitioners and simply allowed the writ petition on the ground that in the impugned order itself, it is mentioned that as and when the services of the NMRs required, they are to be taken only on contract system basis, basing on their qualifications, experience and need and there was no denial of the fact that once need existed to engage the security guards and issued the said direction which necessarily have to be decided by the Industrial Tribunal-cum-Labour Court on raising a dispute by the Union or by the individuals. In view of the same, the impugned order passed by the learned Single Judge of this Court cannot be upheld. Accordingly, the writ appeal is allowed by setting aside the order dated 23.11.2005 passed by the learned Single Judge of this Court in W.P.No.9933 of 2005. However, the petitioners are at liberty to raise an Industrial Dispute before the competent Industrial Tribunal-cum-Labour Court. There shall be no order as to costs. ____________________ A.GOPAL REDDY,J ______________________ P. DURGA PRASAD,J December 08th, 2010 GK. HON’BLE SRI JUSTICE A.GOPAL REDDY & HON'BLE SRI JUSTICE P. DURGA PRASAD WRIT APPEAL No.2517 of 2005 Date:08.12.2010 Gk. [1] 2003(5) ALD 516 (DB)=2003(4) ALT 177