Case: Dbh International Limited Vs. Their Workmen, Represented By The Transport and Dock Workers' Union

placed reliance upon the judgment of the apex Court in (J. K. Synthetics v. Rajasthan Trade Union Kendra), 2001 (2)S. C. C. 87. On the other hand, Mr. Dharap submitted that the Tribunal was wrong in considering the issue of closure and by doing so it travelled beyond the scope of the reference. The reference-was only in respect of retrenchment and no case was made our by the Management about the closure of the company. He further submitted that since the action of retrenchment, under section 25-F (b) was void ob initio, the workmen deemed to be continued in the employment and, therefore, they are entitled for reinstatement with full back wages.( 25 ) THERE was no dispute that after the retrenchment of remaining three workmen on 20. 4. 1992 there was a total closure of the establishment from 30. 4. 1992. It is against this backdrop, we would like to examine the issue raised by Mr. Singh. The Apex Court in J. K. Synthetics (supra) was considering the powers and jurisdiction of the Tribunal while dealing the question as to whether or not the retrenchment was justified. The company in that case was seeking justification of retrenchment of the workmen on the basis that there was a closure of section of its plant. The Tribunal, therefore, went into the question as to whether or not there was a closure for deciding the question as to the legality of retrenchment which the Apex court in that judgment held that there was no error in considering the issue of closure. Paragraph 24 in that judgment may be useful. Paragraph 24 reads thus ;"24. Thus, in our view, the Division Bench erred in coming to the conclusion that the Tribunal could not have gone into the question of closure as it was not referred to it. In our view, on the disputes which have been referred, particularly Dispute No. 2 (set out hereinabove it became absolutely necessary for the Tribunal to first ascertain whether there was a closure and whether such closure was bona fide. "the Apex Court in yet another judgment in Hindustan Steel Works Construction ltd. (supra) considered the question as to whether the reinstatement is must where retrenchment is held to be illegal and/or unjustified. In that case the tribunal had moulded the relief and granted compensation instead of reinstatement. The Apex Court after considering the question involved in that judgment held that the Management was groaning under the weight of surplus and excessive man-power and as such the Industrial Tribunal was entitled to mould the relief to suit the justice of the case. It would be advantageous to quote paragraph 27 of the judgment which reads thus :"27. The appellants have not been able to satisfy us that the several reasons given by the Tribunal for not directing reinstatement of the appellants-workmen are incorrect as a fact or that they are irrelevant or impermissible in law. That the respondent-Corporation is groaning under the weight of surplus and excessive man-power is not denied as a fact; indeed, it is an indeniable fact. The Industrial Tribunal is entitled to take note of the said fact and to mould the relief to suit the justice of the case. In exercise of this Courts power under Article 136 of the Constitution, it is not open to us to substitute our opinion for that of the Industrial Tribunal unless we find that the reasons given by it in the paras aforesaid are either incorrect factually or irrelevant or impermissible in law. Since we are not able to say so, these appeals are dismissed. The appeals filed by the Management also fail and are dismissed. No costs. "therefore, in our opinion, once it is found that though the retrenchment was illegal it was justified, it is for the Tribunal to consider what relief the retrenched workers are entitled to. It is open for the Tribunal, in exercise of its jurisdiction, to take note of the circumstances in a particular case and decide not to grant the relief of reinstatement, but grant a relief of compensation to the workmen. In other words, whenever retrenchment is held to be justified, though it is illegal and improper and if their reinstatement is impossible and/or likely to cause great hardship on the management, then the Court can mould the relief to suit the justice and award compensation to such workmen. In the present case, we have no hesitation in holding that the Tribunal was wrong in awarding reinstatement with full back wages after having accepted that all work had come to an end inasmuch as there was a total closure of the establishment and, therefore, the order of Tribunal granting reinstatement was unjustified and liable to be set aside.( 26 ) AFTER having observed that the order of reinstatement was not justified in view of the total closure of the establishment, in our opinion, the ends of justice would be met if the relief of compensation to the workmen is granted. According to Mr. Singh, learned Counsel for the appellant, no business was transacted after 18. 9. 1991 and the CHA Licence also expired on 31. 12. 1993 and, therefore, in any case the workmen are not entitled for any relief beyond the date of closure and/or the date on which the licence had expired. The learned Single Judge, however, while disposing of the writ petition, had observed that if the Management pays the dues upto date on the basis of cut off date being 31. 12. 1995 then the Award will be marked satisfied. This observation was made 011 the basis of the statement of Mr. Dharap, learned Counsel for the workmen. Keeping the submissions advanced by the learned Counsel appearing for the parties in view and considering that this Court, while admitting the Letters Patent Appeal, had directed the management to deposit the arrears of salary upto 31. 12. 1995 in this Court, in our opinion, that amount should be paid to the workmen as compensation.

Decision (1 = appeal accepted, 0 = rejected): 1

Explanation:
1[ds]( 16 ) IT is well settled that allegation which is not pleaded, even if there is evidence in support of it, cannot be examined because other side has no notice of it and, if entertained, it would be tantamount to granting an unfair advantage to the first mentioned party. In other words, the rules of fair play demand that where a party seeks to establish a contention which if proved would be sufficient to deny relief to the opposite side, such a contention has to be specifically pleaded and then proved. But if there is no pleading, there is no question of proving something which is not pleaded. The Apex Court has reiterated the aforesaid principle in Shankar Chakaravartis case (supra ). In management of Hindustan Steel case (supra) while considering the plea of infirmity of retrenchment notice, it was observed that a general plea that the grounds of retrenchment were false, is not specific and precise enough to enable the employer to meet it. Keeping the proposition of law laid down by the Apex Court in the aforesaid judgments in view, we examined the pleadings.( 17 ) IT is true that the demand notice datedthough states that the retrenchment was illegal and unjustified, except the word illegal no illegality was alleged in the demand notice or reference to the noncompliance with regulatory requirements laid down in sectionor any other provision of i. D. Act for that matter was made therein. The failure report under section 12 (4) of I. D. Act also does not make any reference to the short payment. However, from the perusal of the statement of claim that was filed by the workmen clearly states that "abrupt termination of services of seven workmen by way of retrenchment is illegal, improper, uncalled for and unjustified". Further in paragraph ten thereof the categoric statements were made to the following effect:"that the company issued retrenchment notice datedand offered one months notice wages and retrenchment compensation as provided in Clauses (a) and (b) of sectionof Industrial disputes Act, 1947, but the company has not clarified for how many years of service the retrenchment compensation is paid and, therefore, the said notice is defective. And, therefore, the retrenchment of the workmen is illegal. Also the company has failed to comply with section(C) i. e. serving notice in prescribed manner on the appropriate Government. The Union States that Clauses (a), (b) and (c) of sectionshould be complied with simultaneously before effecting retrenchment. "it was further stated in the statement of claim that the Management failed to comply with the mandatory provisions of law and, therefore, the retrenchment of workmen was illegal. Per contra, what the Management in their written statement in reply to paragraph 10 had stated was that they complied with all the requirements of law including serving the notice to the Government authorities. They had not stated anything in reply to the aforesaid averments in paragraph 10 of the statement of claim. The Management in paragraph 11 of the written statement had stated that "the Court cannot go beyond justifiability or fairness of retrenchment and the Court has no jurisdiction to adjudicate upon the legality of retrenchment" and further that "union had no right to raise an issue of legality of retrenchment and the Tribunal ought to have confined to the terms of reference and had no power to enlarge its scope". In rejoinder filed by the Union, they had reiterated the statements made in the statement of claim and had categorically denied that the Management has complied with all the provisions of law. From the perusal of the affidavit of one of the workmen Mrs. Dammer D"mello filed before the Tribunal in lieu of herin paragraph 9 thereof she had stated thus ;"9. I say that the amount of retrenchment compensation offered by the company as per provisions of Industrial Disputes Act, sectionto all the retrenched workmen is less than they are entitled. For example, I have put in 25 years continuous service and my monthly salary was Rs. 3,044. 65 and, therefore, my retrenchment compensation amount should be Rs. 38,058. 12 but I was offered only Rs. 33,597. 00. "there was noby the Management in respect of the statements made in paragraph 9. The Management in their affidavit dated 14. 6. 1995 filed by one Raman Mistry had stated that "dues offered were offered as per the law after averaging three months salary of each workman and if there is any difference it was unintentional and the company had complied with the substantial requirement of law". From the perusal of the aforementioned pleadings and the evidence, we are of the considered opinion, that it cannot be said that there was no pleading or no evidence was led by the parties in respect of the alleged shortfall in the amount of retrenchment compensation tendered by the Management. We proceed to record our reason for arriving at this conclusion. In the statement of claim, the Union had categorically stated that the company had not clarified for how many years of service the retrenchment compensation was paid and, therefore, the said notice was defective. They had further stated that Clauses (a), (b) and (c) of sectionare mandatory and have not been complied with. Since the particulars as sought in paragraph 10 were not given by the Management, in our opinion, except the general statement that the provisions of Clause (b) of sectionhad not been complied with by the Management, the Union could not have stated anything more than what had been stated in the statement of claim. Had the Management given all the particulars in the retrenchment notice, probably the Union could have made positive statement to the effect that there was a short payment. Since the retrenchment notice itself was vague which did not clarify as to for how many years of service the retrenchment compensation was offered, it was not possible to state anything more than what had been stated in the statement of claim. Moreover, from the perusal of the written statement, it is clear that the Management did have sufficient notice of the stand of the Union. As a matter of fact, in paragraphs 5 and 11 of the written statement, they had categorically stated that the court can only adjudicate as to the justifiability or fairness and not the legality of the notice and that it was not open for the Union to allege that the retrenchment is illegal. That shows that the pleadings were absolutely clear to understand or to mean that the grievance of incorrect tendering of the amount as retrenchment compensation was made by the Union and that the parties went before the Tribunal on both the questions. The evidence of D "mello, one of the workmen, shows that the grievance about the short payment was made. Under the circumstances, it is not open to make a grievance that the management had no opportunity and that the issue was discussed and considered by the Tribunal without any notice. As a matter of fact, from the evidence of Mistry, the witness of the Management, wherein he has stated that "if there is any difference, it was unintentional" shows that the management was. not sure as to whether the amount offered was accurate. From the contents of the written statement and the affidavit, as also the contentions advanced before the Tribunal and this Court it is clear that the objection of the Management was not as whether there existed pleadings but to the jurisdiction of the Tribunal to examine the legality by expanding the scope of the18 ) THUS, it will be seen that, though, there is a definite injunction against the Court not to entertain the questions which are specifically not raised, the apex Court has permitted to raise certain questions which were directly covered by the provisions in this beneficial legislation. Looking to the overall material placed before us, we are of the considered opinion that the workmen had undoubtedly raised the question of short payment and it was correctly understood by the Management and rightly entertained by the Tribunal. Having so observed, in our opinion, the judgments relied upon by the learned Counsel for the Management are of no avail to the Management.(19 ) IN so far as legal issues I and II are concerned, Mr. C. U. Singh submitted that by now it is well settled that the Tribunal cannot enlarge the scope of the reference by deciding matters not referred to it. In other words, the reference made in the instant case was only to examine as to whether the action was justified and, therefore, going into a legality of the action was wrong and amounts to enlarging the scope of the reference. He placed heavy reliance upon the following judgments in support of his submission. (i) (Delhi Cloth and General Mills v. Their Workmen), 1967 (1) L. L. J. 423, (ii) (Firestone Tyre and Rubber Company v. Workmen), 1981 (3) S. C. C. 451, (iii) (Pottery Mazdoor Panchayat v. Perfect Pottery Company), A. I. R. 1979 s. C. 1356, and (iv) (Sitaram Vishnu Shirodkar v. Administrator, Gout. of Goa), 1985 (1)L. L. J. 480. It was further submitted that legality and justifiability have always been differently understood in industrial adjudication, the former referring to compliance with regulatory provisions of the Act while latter refers to the justification for taking a decision or action against the workmen. Reliance was placed on (Agra Electric Company v. Workmen11, 1983 (1) S. C. C. 436 and (Syndicate bankv. K. Umesh Nayak),a. I. R. 1995 S. C. 319 in support of this submission. In view of the law settled by the Apex Court in the aforesaid judgments and in several other judgments, it was not open to the Tribunal to fall back upon the dictionary meaning of the word "justify" or "justifiable". Reliance was also placed on the judgment of (Workmen of Coimbatore Pioneer "b" Mills v. Labour Court) (1980)1 L. L. J. 503 : (1979)54 F. J. R. 236 (S. C.); (Shankar kishan Nikam v. Bhide and Sons), 1983 (46) F. L. R. 95l industries v. KG. Sawant), 1984 (48) F. L. R. 376 (Bom.) and (Shiv Kumar v. State of Haryana), 1994 (4) S. C. C. 445 in support of this22 ) IT would be useful to reproduce the provisions contained in section 10 (4) of the I. D. Act, which deals with Reference of disputes to Boards, Courts or Tribunals, for better appreciation of the submissions advanced by the learned counsel appearing for the parties. Section 10 (4) reads thus:"10. Reference of disputes to Boards, Courts or Tribunals:(4) Where in an order referring an industrial dispute to a Labour Court, tribunal or National Tribunal under this section or in a subsequent order, the appropriate Government has specified the points of dispute for adjudication, the Labour Court or the Tribunal or the National tribunal, as the case may be, shall confine its adjudication to those points and matters incidental thereto. "it clearly provides that an industrial dispute which has been referred to by the appropriate Government has to specify the points of dispute for adjudication and the Tribunal shall confine its adjudication to those points and the matter incidental thereto. This only means that the Tribunal must confine its attention to the points specifically mentioned and matter which is incidental thereto. However, it would be useful to see as to how the Apex Court, while dealing with this section in (Express Newspapers (P) Ltd. v. The Workers), (1962)23 F. J. R. 1, had looked at it which observed as follows:". . . . . . . Since the jurisdiction of the Industrial Tribunal in dealing with industrial disputes referred to it under section 10 is limited by section 10 (4)to the points specifically mentioned in the reference and matters incidental thereto the appropriate Government should frame the relevant orders of reference carefully and the questions. which are intended to be tried by the Industrial Tribunal should be so worded as to leave no scope for ambiguity or controversy. An order of reference hastily drawn or drawn in a casual manner of ten. gives. risc to unnecessary disputes and thereby prolongs the life of industrial adjudication which must always be avoided Even so. when the qugstion of this kind is raised, before the courts the courts must attempt to construe the reference not too technically or in a pedantic manner, but fairly and reasonably. . . . ". (emphasis supplied)The appropriate Government is, thus, expected to frame the order of reference carefully and the questions, which are intended to be dealt with by the industrial Tribunal, should be worded as to leave no scope for ambiguity. In other words, the appropriate Government, while framing the order of reference, the questions which are raised and intended to be tried by the Tribunal should be framed carefully and not in a casual manner. Even if such questions are raised the Tribunal is not liable to construe them too technically and in a pedantic manner. In the instant case, the demand notice datedgiven by the Union had clearly indicated that the retrenchment in question was illegal and unjustified, though particulars of illegality were not referred to in the notice of demand. However, as observed earlier, the pleadings i. e Statement of claim filed by the Union made, makes it absolutely clear that even the question of legality of the action of retrenchment was also raised by the Union and that the Management was not taken by surprise. However, the management chose to challenge the question of legality, as raised in the statement of claim, contending that the Tribunal cannot enlarge the scope of reference and it was binding on the Tribunal to decide only as to whether the action of retrenchment was "justified". Therefore, in any case, the Management cannot claim that the Tribunal considered the question of legality also without giving an opportunity to the Management or that the Management was taken by surprise. It is thus clear that the Tribunal attempted to construe the reference fairly and reasonably and in a pragmatic manner. The Apex Court in Agra Electric Supply Company Limited (supra), while considering the terms "justified" and "legal" has clearly held that it is plain that industrial jurisprudence is an alloy of law and social justice, and one cannot be too pedantic in construing the terms of a reference respecting a dispute for industrial adjudication. Undoubtedly, the Apex Court in that judgment has also observed that the words "justified" and "legal" are differently understood in the industrial jurisprudence and when the reference is comprehensive enough to cover both these concepts, it is within the jurisdiction of the Tribunal to investigate into whether the retrenchment is legal, if legal, whether it is also justified. However, what is further observed in that judgment is more relevant, which reads thus :"in the ordinary law of contracts, when a thing done is legal there is an end of the matter but in industrial law the rigid rules of contract do not govern the situation and an amount of flexibility in the exercise of powers taking liberties with the strict rights of parties is permitted to Tribunals. Relying on a series of decisions of this Court for this wider ambit of jurisdiction permissible in industrial adjudication, the Tribunal has held that the grievance of the workmen that their services should come to an end by way of retirement without payment of gratuity is real and substantial and that pragmatic considerations justify a direction for payment of gratuity more or less prevalent in many industries in the region. This approach is informed by social justice, and it is not for us to fault the Tribunal when it makes a direction for payment of gratuity. We read the award in a composite and comprehensive sense as an award that the retirement is justified if it is accompanied by payment of gratuity. The dissection attempted in the submission made by the learned Counsel is a distortion of the true intendment of the award". In the present case, the Tribunal has considered the legality of the action holding that the grievance of the workmen was not only against the action but it was against its validity. Action may be justified but it was found to be illegal. The Management did not make any attempt either before the Tribunal or even before this Court to justify the action as legal. On the contrary, the stand of the Management all throughout was that the retrenchment compensation was rightly computed by the Management by applying a divider of 30 days. We have already held that the application of divider of 30 days for computing the retrenchment compensation was not only wrong but it was patently illegal. We have also held that the excess payment made under other heads cannot be taken into account for making the shortfall good. Thus, the tribunal was justified in considering the question of legality or validity of the action. The legality of the action touches the provisions of section(a) and (b) of the I. D. Act. Clause (a) mandates the Management to give a notice before termination and Clause (b) mandates the Management to offer retrenchment compensation which shall be equivalent of 15 days average pay for every completed year of continuous service or any part thereof in excess of six months. These provisions are not only mandatory but imperative in nature. It is against this backdrop the Tribunal, has held that the action was illegal. In any case, in view of the stand of the Management that they rightly applied a divider of 30 days, they cannot now claim that they were taken by surprise and that they did not get an opportunity to meet the question of legality. The learned Single Judge has rightly observed in the impugned order while dismissing the writ petition that "though the reference made by the Government is only regarding justifiability and not legality but in this case finding on Issue no. 2 indicates that the parties went before the Tribunal on both the questions". Mr. Singh, placed reliance upon several judgments of the Apex Court in support of his submission that the Tribunal enlarged the scope of the reference by entering into a question of legality of the action which, in our opinion, are of no avail to the appellant in view of the peculiar facts and circumstances of this case. We have already held that in the facts of the present case, the tribunal was justified in entering into a question of legality also and the tribunal cannot be said to have enlarged the scope of the reference. The submission made by Mr. Singh that though the words "legal" and "justified" are differently understood in industrial adjudication, does not mean that the tribunal in the present case was not justified, in entering into a question of legality of the action which ultimately was found to be patently illegal. In so far as the submission of Mr. Dharap, learned Counsel, based on sectionof the I. D. Act is concerned, we do not propose to examine that submission, though we have our reservations about its correctness, in view of the fact we have already upheld the findings of the Tribunal and which have been affirmed by the learned Single Judge. ( 23 ) THE submission of Mr. Singh that the workmen had confined their allegations to justification and the Managements motive while retrenching them is factually incorrect. We have considered the pleadings in the earlier part of the judgment. They are absolutely clear. The Union had categorically raised an issue of legality in their pleadings and had also led evidence in support thereof. Moreover, the Management chose not to meet the allegation of the Union in respect of legality of the action. It cannot be said that the union had never at any stage prior to the order of reference sought to challenge or even question the legality of action. As a matter of fact, though the illegality was not spelt out in the demand notice, the action was described as illegal. In the circumstances, we have no hesitation in holding that the Tribunal was justified in examining the legality of the action. ( 24 ) THIS takes us to consider the last question as to whether the Tribunal erred in awarding the reinstatement with full back wages after having accepted that all work had come to an end, merely because the question of closure was not referred to it. Mr. Singh submitted that once having found that there was no business transacted after 18. 9. 1991 and even CHA Licence had also expired on 31. 12. 1993 it was clearly not proper for the Tribunal to award reinstatement with full back wages. He further submitted that no relief can be granted beyond the date of closure and that no industrial dispute can survive after the closure. In support of his submission, he placed reliance upon the judgment of the apex Court in (J. K. Synthetics v. Rajasthan Trade Union Kendra), 2001 (2)S. C. C. 87. On the other hand, Mr. Dharap submitted that the Tribunal was wrong in considering the issue of closure and by doing so it travelled beyond the scope of the reference. Theonly in respect of retrenchment and no case was made our by the Management about the closure of the company. He further submitted that since the action of retrenchment, under section(b) was void ob initio, the workmen deemed to be continued in the employment and, therefore, they are entitled for reinstatement with full back wages.( 25 ) THERE was no dispute that after the retrenchment of remaining three workmen on 20. 4. 1992 there was a total closure of the establishment from 30. 4. 1992. It is against this backdrop, we would like to examine the issue raised by Mr. Singh. The Apex Court in J. K. Synthetics (supra) was considering the powers and jurisdiction of the Tribunal while dealing the question as to whether or not the retrenchment was justified. The company in that case was seeking justification of retrenchment of the workmen on the basis that there was a closure of section of its plant. The Tribunal, therefore, went into the question as to whether or not there was a closure for deciding the question as to the legality of retrenchment which the Apex court in that judgment held that there was no error in considering the issue of closure. Paragraph 24 in that judgment may be useful. Paragraph 24 reads thus ;"24. Thus, in our view, the Division Bench erred in coming to the conclusion that the Tribunal could not have gone into the question of closure as it was not referred to it. In our view, on the disputes which have been referred, particularly Dispute No. 2 (set out hereinabove it became absolutely necessary for the Tribunal to first ascertain whether there was a closure and whether such closure was bona fide. "the Apex Court in yet another judgment in Hindustan Steel Works Construction ltd. (supra) considered the question as to whether the reinstatement is must where retrenchment is held to be illegal and/or unjustified. In that case the tribunal had moulded the relief and granted compensation instead of reinstatement. The Apex Court after considering the question involved in that judgment held that the Management was groaning under the weight of surplus and excessiveand as such the Industrial Tribunal was entitled to mould the relief to suit the justice of the case. It would be advantageous to quote paragraph 27 of the judgment which reads thus :"27. The appellants have not been able to satisfy us that the several reasons given by the Tribunal for not directing reinstatement of theare incorrect as a fact or that they are irrelevant or impermissible in law. That theis groaning under the weight of surplus and excessiveis not denied as a fact; indeed, it is an indeniable fact. The Industrial Tribunal is entitled to take note of the said fact and to mould the relief to suit the justice of the case. In exercise of this Courts power under Article 136 of the Constitution, it is not open to us to substitute our opinion for that of the Industrial Tribunal unless we find that the reasons given by it in the paras aforesaid are either incorrect factually or irrelevant or impermissible in law. Since we are not able to say so, these appeals are dismissed. The appeals filed by the Management also fail and are dismissed. No costs. "therefore, in our opinion, once it is found that though the retrenchment was illegal it was justified, it is for the Tribunal to consider what relief the retrenched workers are entitled to. It is open for the Tribunal, in exercise of its jurisdiction, to take note of the circumstances in a particular case and decide not to grant the relief of reinstatement, but grant a relief of compensation to the workmen. In other words, whenever retrenchment is held to be justified, though it is illegal and improper and if their reinstatement is impossible and/or likely to cause great hardship on the management, then the Court can mould the relief to suit the justice and award compensation to such workmen. In the present case, we have no hesitation in holding that the Tribunal was wrong in awarding reinstatement with full back wages after having accepted that all work had come to an end inasmuch as there was a total closure of the establishment and, therefore, the order of Tribunal granting reinstatement was unjustified and liable to be set aside.( 26 ) AFTER having observed that the order of reinstatement was not justified in view of the total closure of the establishment, in our opinion, the ends of justice would be met if the relief of compensation to the workmen is granted. According to Mr. Singh, learned Counsel for the appellant, no business was transacted after 18. 9. 1991 and the CHA Licence also expired on 31. 12. 1993 and, therefore, in any case the workmen are not entitled for any relief beyond the date of closure and/or the date on which the licence had expired. The learned Single Judge, however, while disposing of the writ petition, had observed that if the Management pays the dues upto date on the basis of cut off date being 31. 12. 1995 then the Award will be marked satisfied. This observation was made 011 the basis of the statement of Mr. Dharap, learned Counsel for the workmen. Keeping the submissions advanced by the learned Counsel appearing for the parties in view and considering that this Court, while admitting the Letters Patent Appeal, had directed the management to deposit the arrears of salary upto 31. 12. 1995 in this Court, in our opinion, that amount should be paid to the workmen as compensation.