Case: Office Liquidator, Gujarat State Textile Corpn. Ltd Vs. Parmanand Maneklal Kajiwala & Others

1. Leave granted.2. The question which is to be decided in this case relates to the interpretation of S.11(3) of the Gujarat Closed Textile Undertakings (Nationalisation) Act, 1986 (hereinafter referred to as "the Act"). By this Act, the appellant before us took over the management and assets of several textile undertakings which were closed. S.11 deals with the relationship of the appellant with the employees of the taken over undertakings.3. Respondent 1 who is the employee in this particular case, had been dismissed in 1983. The dismissal was challenged before the Labour Court. The Labour Court by an award dated 3-1-1986 set aside the order of dismissal and directed that the respondent should be reinstated with all consequential benefits.4. The mill which had been closed in 1984, was taken over by the appellant under the Act on 8-11-1985. It is not in dispute that the appellant has been able to restart the mills subsequently. The respondent claims that he was not only entitled to the benefits of reinstatement in the sense of arrears of salary from the erstwhile company from the date of dismissal up to the date of taking over i.e. 8-11-1985, but was also entitled to reemployment with the appellant for the period 15-1-1987 to 27-8-1989. As far as the first claim is concerned that is not controverted by the appellant. As far as the second part of the claim is concerned, it was the respondents case before the High Court that the appellant had reappointed persons who were junior to the respondent workman in service on 15-1-1987. It is therefore, the respondents prayer that he should have been considered for appointment and that he was entitled to wages until the date of his superannuation i.e. 27-8-1989. This was accepted by the High Court on the ground that the appellant had not denied in its affidavit that it had in fact reappointed the persons who were junior to the respondent without considering the respondents case. 5. The High Court appears to have misdirected itself. The issue was not one of fact but of law. The question was whether under S.11(3) of the Act, the respondent workman could be deemed to have continued in service or had any right under the Act to be reemployed. 6. S.11(3) provides as follows: "11. (3)(a) The services of every person employed by the owner before the appointed day shall stand terminated --(i) on the designated date if such person is not employed before that date by the Corporation under sub-s.(1) or (2), and(ii) on the date of his appointment if such person is employed before the designated date by the Corporation under sub-s.(1) or (2).(b) A person whose services stand terminated under sub clause (i) of clause (a) shall not be entitled to claim employment in the Corporation as of right." 7. Sub-s.(4) of S.11 provides for the payment of gratuity and / or compensation to the workman whose services so stood terminated on or before the appointed date i.e. 8-11-1985. 8. The sub-section clearly provides that the services of every person employed by the erstwhile company before the appointed date would stand terminated on the designated date i.e. 8-11-1985. By the award passed by the Labour Court, the respondent workman was no doubt given notional reinstatement as if he had continued in service without the order of termination having been passed. That being so the workman would be treated on par with such of the other employees who had continued in service with the erstwhile owner up to the designated date. Along with other workmen, the respondents services would also stand terminated and he would be entitled then to the compensation as provided under sub-s.(4) of S.11. None of the provisions of the Act direct that the appellant would be under any obligation to reemploy the workman whose services have been so terminated under S.11(3). In fact, the High Court proceeded on an erroneous terminology. It was not a case of reemployment but a fresh employment of the other workmen who, the respondent claims were junior to the respondent prior to his termination from service. In the circumstances, there was no question of the respondent workman being considered for appointment merely on the ground of the employment of these three workmen even if they were junior to him while they were in service in the erstwhile company.

Decision reasoning: 1[ds]5. The High Court appears to have misdirected itself. The issue was not one of fact but of law. The question was whether under S.11(3) of the Act, the respondent workman could be deemed to have continued in service or had any right under the Act to be reemployed.The sub-section clearly provides that the services of every person employed by the erstwhile company before the appointed date would stand terminated on the designated date i.e. 8-11-1985. By the award passed by the Labour Court, the respondent workman was no doubt given notional reinstatement as if he had continued in service without the order of termination having been passed. That being so the workman would be treated on par with such of the other employees who had continued in service with the erstwhile owner up to the designated date. Along with other workmen, the respondents services would also stand terminated and he would be entitled then to the compensation as provided under sub-s.(4) of S.11. None of the provisions of the Act direct that the appellant would be under any obligation to reemploy the workman whose services have been so terminated under S.11(3). In fact, the High Court proceeded on an erroneous terminology. It was not a case of reemployment but a fresh employment of the other workmen who, the respondent claims were junior to the respondent prior to his termination from service. In the circumstances, there was no question of the respondent workman being considered for appointment merely on the ground of the employment of these three workmen even if they were junior to him while they were in service in the erstwhile company