C.W.P. No.5079 of 1994 -1- IN THE HIGH COURT FOR THE STATES OF PUNJAB AND HARYANA AT CHANDIGARH C.W.P. No.5079 of 1994 Date of Decision:04.09.2009 Kharar Woollen Workers Union (regd) and others .....Petitioners Versus National Textile Corporation Limited and another ...Respondents Present: Mr. J.C. Verma, Sr. Advocate with Ms. Deepinder Kaur, Advocate for the petitioners. Mr. H.N. Mehtani, Advocate for respondent No.1. Ms. Monica Chhibbar Sharma, DAG, Punjab. CORAM:HON'BLE MR. JUSTICE K. KANNAN 1. Whether Reporters of local papers may be allowed to see the judgment ? 2. To be referred to the Reporters or not ? 3. Whether the judgment should be reported in the Digest? -.- K. KANNAN J.(ORAL) 1. The writ petition seeks for a direction against the State to implement the award of the Labour Court Patiala dated 20.04.1975 published in the Punjab Government Gazette dated 25.07.1975 by reinstating the petitioners-workmen with continuity of service from due date along with all the benefits accruing therefrom. The petitioner- union had earlier sought for a reference with regard to a dispute arising out of dismissal of 26 workmen. The award was passed in favour of the workmen where M/s Padamshree Textile Industries Limited, Kharar had been shown as the management. The award allowed for reinstatement of the workmen but disallowed the claim for back wages. 2. It is an admitted case that none of the workmen, who joined in raising the dispute was reinstated in service but hence they filed an C.W.P. No.5079 of 1994 -2- application under Section 33(C) (2) of the Industrial Disputes Act claiming wages from the date of the award of the Labour Court on 30.04.1975 till the date of filing of the petition, which had been moved on 22.08.1977. The petition contained details of the amounts due for each workman from 30.04.1975 upto the date of the petition, where the workmen had not been employed and in respect of the workmen who had been employed upto the date of the actual employment and the wages that stood due upto that date. The petition had been filed not merely against M/s Padamshree Textiles Industries Limited but also against M/s Panipat Woollen Mills describing it to be a unit of National Textile Corporation, Kharar. It transpires that the factory had become sick and it was taken over as a unit of the National Textile Corporation under the provisions of the Sick Textile Undertaking (Nationalization) Act, 1974. It was contended before the Labour Court that the National Textile Corporation had no liability to answer the claim of the workmen and they have to be addressed only against the previous owner-M/s Padamshree Textile Industries Limited. This objection was specifically considered by the Labour Court when it held thus: “.....In the case in hand, the award was made by the Labour Court. The award was challenged by the P.T.I. Ltd. by way of filing writ petition, but the said writ petition was dismissed. The claim has been made on the basis of the award. Under Section 18(3) of the Industrial Disputes Act, 1947, where a party referred to in clause (a) or clause (b) is an employee heir, successor or assigns in respect of the establishment to which the dispute relates shall be bound by the settlement. C.W.P. No.5079 of 1994 -3- In the case in hand, all the liabilities effects and rights were transferred and as such N.T.C. was successor in interest. I am inclined to agree with Bawa Kartar Singh representative of the workmen that the award was enforceable since during the period of 26.02.1975 to 06.04.1974 when the stay was effected by the Hon'ble Supreme Court P.T.I. Ltd. was the receiver. The workmen have claimed wages. They have not claimed computation of their services. In my opinion, the enforcement of the award was not barred and the application was maintainable. The claim of the workmen is based on the enforcement of the award. The award was not enforced by the respondent after the passing award., The workmen refused to provide duty, rather writ was filed. The respondent has avoided the enforcement of the award. From the evidence produced on the file it was shown that the workmen approached the management to provide them duty but th respondent management had not provided duty, knowing the consequence, I am satisfied that the management deliberately did not enforce the award. The National Textile Corporation is the successor in interest and the award is binding on the National Textile Corporation....” 3. The reasoning adopted by the Labour Court was that the National Textile Corporation as a successor was bound by the settlement which had been effected under Section 18(3) and it was also bound to undertake the liability of the wages that had not been paid by choosing not to employ them, although there was an award for C.W.P. No.5079 of 1994 -4- reinstatement for all the workmen. This order of the Labour Court was challenged by means of a writ petition by the National Textile Corporation through its General Manager, Panipat Woollen Mills Limited describing again as a unit of the National Textile Corporation. The civil writ petition No. 3106 of 1982 was summarily rejected. The National Textile Corporation again challenged the award of the Labour Court and the High Court and the Hon'ble Supreme Court had dismissed it in limine in Civil Appeal No.5776 of 1983 affirming the decision of the Labour Court and the High Court. In effect, it was clearly rejecting the plea made on behalf of the National Textile Corporation that it was not liable to answer the claim of the workmen. 4. The workmen, who had a favourable award directing reinstatement remained merely as paper and it never got translated to any meaningful benefits. It was brought out on record that the workmen went through several entreaties through representations to Government, to Manager of the mill and to every one whom they thought could come to their succour. Their supplications came to nothing between the years from the award had been passed to 1994. The wheels of time crushed the lives of some of them and some of them could survive to come to the court with the writ petition seeking for the reliefs referred to above. 5. The principal contest is entered by the National Textile Corporation whose contention is that by virtue of the provisions of Section 5 of the Sick Textile Undertaking (Nationalization) Act of 1974, the liability shall be restricted only to what are specifically enumerated under Sub-Section 2. The appointed date prescribed under the Act was 01.04.1974 and since the industry had been taken over, the C.W.P. No.5079 of 1994 -5- liability that arose after the take over alone shall be answerable and whatever claim that the workmen had against the previous owner cannot be enforced against it. Such a contention, in my view, is untenable. The relevant provision relied upon by the counsel for NTC reads as follows: 5. Owner to be liable for certain prior liabilities.—(1) Every liability, other than the liability specified in sub-section (2) of the owner of a sick textile undertaking, in respect of any period prior to the appointed day, shall be the liability of such owner and shall be enforceable against him and not against the Central Government or the National Textile Corporation. (2) Any liability arising in respect of— (a) loans advanced by the Central Government, or a State Government, or both, to a sick textile undertaking (together with interest due thereon) after the management of such undertaking had been taken over by the Central Government, (b) amounts advanced to a sick textile undertaking (after the management of such undertaking had been taken over by the Central Government), by the National Textile Corporation or by a State Textile Corporation, or by both, together with interest due thereon, (c) wages, salaries and other dues of employees of the sick textile undertaking, in respect of any period after the management of such undertaking had been taken over by the Central Government, shall, on and from the appointed day, be the liability of the Central Government and shall be discharged, for and on behalf of that Government, by the National Textile Corporation as and when repayment of such loans or amounts becomes due or as and when such wages, salaries or other dues become due and payable. This section is only a specie of liability that the Act casts on the previous owner as well as some liability regarding some monetary obligations on the successor NTC. The lialbility to continue the employment of the workmen under the earlier owner is saved under another section, which the learned counsel for NTC omits to advert to. The relevant section is under Chapter V of the Act, which through section 14 provides as under: 14. Employment of certain employees to continue.—(1) Every person who is a workman within the meaning of the Industrial Disputes Act, 1947 (14 of 1947), and has been, immediately before the appointed day, employed in a sick textile undertaking shall become, on and from the appointed day, an employee of the National Textile Corporation, and shall hold office or service in the National Textile Corporation with the same rights and privileges as to pension, gratuity and other matters as would have been admissible to him if the rights in relation to such sick textile undertaking had not C.W.P. No.5079 of 1994 -6- been transferred to, and vested in, the National Textile Corporation, and shall continue to do so unless and until his employment in the National Textile Corporation is duly terminated or until his remuneration, terms and conditions of employment are duly altered by the National Textile Corporation. (2) Every person who is not a workman within the meaning of the Industrial Disputes Act, 1947 (14 of 1947), and who has been, immediately before the appointed day, employed in a sick textile undertaking shall, in so far as such person is employed in connection with the sick textile undertaking which has vested in the National Textile Corporation, become, as from the appointed day, an employee of the National Textile Corporation and shall hold his office or service therein by the same tenure, at the same remuneration and upon the same terms and conditions and with the same rights and privileges as to pension and gratuity and other matters as he would have held the same under the sick textile undertaking if it had not vested in the National Textile Corporation and shall continue to do so unless and until his employment in the National Textile Corporation is duly terminated or until his remuneration, terms and conditions of employment are duly altered by the National Textile Corporation: Provided that in respect of any sick textile undertaking the management of which could not be taken over by the Central Government under the Sick Textile Undertakings (Taking Over of Management) Act, 1972 (72 of 1972), by reason of any decree, order or injunction of any court, any agent, director (including a managing or whole-time director, by whatever name called) or manager shall not become an employee of the National Textile Corporation. (3) Notwithstanding anything contained in the Industrial Disputes Act, 1947 (14 of 1947), or in any other law for the time being in force, the transfer of the services of any officer or other person employed in a sick textile undertaking to the National Textile Corporation shall not entitle such officer or other employee to any compensation under this Act or any other law for the time being in force and no such claim shall be entertained by any court, tribunal or other authority. (4) Where, under the terms of any contract of service or otherwise, any person whose services become terminated or whose services become transferred to the National Textile Corporation by reason of the provisions of this Act is entitled to any arrears of salary or wages or any payment for any leave not availed of or any other payment, not being payment by way of gratuity or pension, such person may, except to the extent such liability has been taken over by the Central Government under Section 5, enforce his claim against the owner of the sick textile undertaking but not against the Central Government or the National Textile Corporation. The effect of this section to continue the employment whose termination by the previous owner was held to be bad and hence ordered to be reinstated is too obvious to require any dilation. The NTC was therefore bound to re-instate the workmen who had obtained the C.W.P. No.5079 of 1994 -7- favourable award in their favour. The failure to reinstate them was therefore wholly untenable. 6. It was held in Dinanath Ambadas Udhare and others Vs. P.S. Malvankar, President, Industrial Court, Bombay and others (1981) 42 FLR 304 that employees ordered to be reinstated by Labour Court against a textile mill taken over by the Central Government could enforce the claim under Section 14(1) of the Sick Textile Undertaking (Nationalization) Act, 1974 against the new undertaking. The claim to reinstatement, it was held in M/s Bijli Cotton Mills, Hathras Vs. Labour Court, Agra and others 1988 LAB I.C. 659, may not be asked by reference to Section 5 by workmen who were in lawful employment of erstwhile sick mill and whose services were wrongly terminated. In the above case, the Allahabad High Court held that neither Section 5 of the Sick Textile Undertaking (Nationalisation) Act, 1974 nor Section 25 (FF) of the Industrial Disputes Act applied. It would be under Section 14 that the workmen would obtain the reliefs. 7. In any event, it cannot survive for the respondent to take up such a contention of non-entitlement to reinstatement after the disposal of the application under Section 33(C) (2) of the Industrial Disputes Act which stood confirmed upto the Hon'ble Supreme Court. The learned counsel appearing for the 1st respondent would contend that the previous proceedings under Section 33(C)(2) related only to claim for wages whereas in this writ petition they are seeking for reinstatement and other consequential benefits. It shall be remembered that a right to claim wages under Section 33(C)(2) is invariably in the nature of execution. The workmen could have had no right if they did not have an adjudication already in their favour on the basis of which the C.W.P. No.5079 of 1994 -8- application under Section 33(C) (2) was filed. In other words, the finding of the entitlement to wages itself pre-supposes their entitlement to the work. One cannot exist without the other. If their entitlement was upheld, a fortiori it has to be taken that they were entitled to be reinstated and considered as such. The liability which the NTC had to bear by the order of the Labour Court as affirmed upto the Hon'ble Supreme Court was not in an instance of charity. It was, on the other hand, a considered obligation cast on its shoulders as a successor to the previous establishment. If in the perception of the 1st respondent, the liability was untenable by virtue of the provisions of the Sick Textile Undertaking (Nationalization) Act of 1974, the decision of the Labour Court and which stood confirmed upto the Hon'ble Supreme Court would itself operate to bind the Corporation on the principle of res judicata. The respondent shall not be permitted to reopen the issue of the liability in the present proceedings. 8. From the year when the writ petition was filed in the year 1994 till now much water has flowed under the bridge. Many of the workmen are reported to have been died. If some of them had survived, they would have been superannuated. Their prayer for reinstatement under the circumstances becomes incapable of being granted. In my view, the appropriate relief shall only be to treat them as retired with all the benefits from the date of the award of the Labour Court namely from 30.04.1975 till the date of the superannuation if they had been in service or death that may have occasioned to some of the workmen, whichever was earlier. Any amount, which the workmen had obtained by virtue of the order passed by the Labour Court under Section 33(C) (2) shall be deducted from their entitlements. The amounts that shall be C.W.P. No.5079 of 1994 -9- found due shall carry interest at 9% per annum. The relief is modified in the writ petition to cope with what is exigent and appropriate under the circumstances. The attempt of the 1st respondent at all times to evade the duty which is cast on them ill-behoves an institution of public character. By their wanton conduct and complete insensitivity to human sufferings by unemployment despite awards in their favour, not to leave out of reckoning statutory protection to workmen and brazen violation by the Management, they have engaged the workmen and their families by frivolous defence and prolonged the agony of litigation for over 3 decades. 9. The assessment of liability to the petitioners and the other workmen or their legal representatives, who had obtained favourable awards in their favour shall be undertaken expeditiously and the payments shall be made within a period of three months from the date of receipt of copy of this order. The writ petition is allowed with costs assessed at Rs.50,000/- against the 1st respondent. (K. KANNAN) JUDGE September 04, 2009 Pankaj*