Case: Mackinon Mackenzie Limited Vs. G.S. Raj and Others

trial Court held that there was breach of Section 25G of Industrial Disputes Act.33. At the cost of repetition it must be observed that in the instant case the Respondent company has failed to establish that for reasons recorded by them they deviated from Rule 25G. They failed to prove from the seniority list the retrenched workers and the reasons for retrenchment for particular workers. If the Respondent company had adduced such evidence then complainant union was bound to rebut the said evidence but as the Respondent company itself failed to mention the reasons for deviation the question of complainant union pleading that said deviation was not bonafide does not arose. Thus, after careful scrutiny of the entire evidence and position of law we have absolutely no hesitation to hold that in the instant case there was clear cut breach of Section 25G by the Respondent company.34. The learned trial Judge has specifically held that the Respondent company had in fact not published the notice as well as the seniority list on the notice board as contended by them. It is in fact established that defendant company had tried to keep every thing in secret and for that purpose only they had not displayed any notice of retrenchment on the notice board initially. They preferred to send the notices to the workers who were to be retrenched by RPAD. Though usually the letters from the company are sent after franking at the companys machine for the notices in question the said machines was not used and some different machines was used. That was obviously with a view that workers should not come to know early about the process of retrenchment. The learned trial Judge has rightly recorded the finding that 7 days notice as contemplated in Rule 81 of the Industrial Disputes (Bombay) Rule 1957 was not issued in the instant case. The said finding of fact is based on the evidence on record and proper appreciation of the same. We therefore feel that the same is unassailable.RULE 81 OF INDUSTRIAL DISPUTES (BOMBAY) RULES, 1957 says ---81. Maintenance of seniority list of workmen - (1) The employer shall prepare a list of all workmen in the particular category from which retrenchment is contemplated arranged according to the seniority of their service in that category and cause a copy thereof to be posted on a notice board in conspicuous place in the premises of the industrial establishment at least seven days before the actual date of retrenchment.35. Shri Grover, learned Counsel for the complainant union submitted that above mentioned Rule is mandatory and breach of the same amounts to unfair labour practice. For this proposition he has placed reliance on a case Navbharat Hindi Daily V/s. Navbharat Shramik Sangh- 1985 (I) LLJ Bombay 474 wherein it has been held that Section 25G can be followed only if seniority list has been prepared in accordance with the rule 81. The intention of such a list is to allow workmen to object to the said list and thereby avoid hardship. The exhibition of such a list is with a view to protect the interest of workmen and to provide safeguard against Section 25G and as such Rule 81 casts an obligation on the employer to strictly follow it. In fact it is very clear that Rule 81 has been introduced to ensure due compliance of Section 25G of Industrial Disputes Act. For this useful reference an be made to a case Trade Wings Ltd. V/s. Prabhakar 1992(1) LISSOM 9. The learned Counsel for the complaint union has also drawn our attention to a case Prakash M. Dalal V/s. Tata Engineers Locomotive 1996(1) LYSOL 13 wherein also it has been held that provisions contained in Rule 81 is for effective compliance of Section 25G and is mandatory and its breach would definitely vitiate any order of retrenchment of a workmen since in the absence of a seniority list. Compliance of Section 25G cannot be checked and verified. Thus there is catena of rulings in which it has been held that Rule 81 is mandatory. However Shri Cama, learned Advocate for the Respondent company vehemently argued before us that in Chemical Major Sabah V/s. Vistas Organic (1995) IS SLUR 466 the learned single Judge of this Honble Court (Coram: Shrikirshna J as His Lordship then was) has held that Rule 81 per se is only directory rule and not mandatory. The learned Counsel for the union however submitted that as in the case of Navbharat Daily Case, Division Bench of this Court has held that Rule 81 is mandatory, that decision holds the field and should be accepted. As against this, it was canvassed before us by the learned Advocate for the Respondent company that learned single Judge has in fact considered the observations in N.B. Hind Oil and has observed that Division bench has not laid down the proposition that Rule 81 per se is mandatory. However, as in the instant case there is clear cut breach of Section 25G of Industrial Dispute Act and Rule 81 of the Industrial Bombay Rule 1957, cumulative effect of the same is that action of retrenchment taken by the management is totally illegal and amounts to unfair labour practice.36. We are therefore of the view that the learned trial Judge has rightly declared that Respondent company has committed unfair labour practice under Item 9 of Schedule VI of the M.R.T Act 1971 by not displaying the seniority list as provided in Rule 81 of Industrial Disputes (Bombay) Rules 1957 at the time of retrenching workers and by committing breach of Section 25G of Industrial Disputes Act by not following the Rule of lst come first go and for not recording the reasons for deviation from the said Rule. The order passed by the learned Member, Industrial Court was legal and correct and therefore, the learned single Judge of this Court rejected the writ petition filed by the Respondent company. Thus, there is no substance in this appeal.

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

Explanation:
0[ds]20. Bearing in mind the above definitions if we see the pleadings of Respondent Company as well as the evidence on record then also it is very clear that case in hand is not a clear case of closure but it can only be said that it is pertaining to retrenchment arising out of a particular policy adopted by the company viz. curtailing certain activities and closing certain departments of the company. Even if we see the statement of reasons, attached to the notice issued to the workmen, then also we find that the company has nowhere stated therein that they have taken a decision to close down the business entirely. On the contrary, it is stated by them that as company is running into losses the Board of Directors after considering all aspects have taken the decision to rationalise the activities in Bombay office and closing down of its activities apart from the property owning and development and portion of clearing and forwarding business relating to the contracts with Government of India institution such as Central Railway and Lubricant India Ltd. Admittedly, it is not even the case of the company that they took the decision to retrench the workers working in the respective departments which were to be closed. In case of closure, there is an end to the whole or to part of the industry on the other hand retrenchment is a termination of surplus or other employees during the subsistence of an industry.If really the Respondent company had an intention to resort to the policy of closure then certainly they had issued 60 days notice contemplated as per above section, but, admittedly, company has not done so and on the contrary tried to issue notice required for retrenchment. So, from all this material on record and the position of law we have no hesitation to hold that case in question is not a clear case of closure as contemplated under Section 2(cc) mentioned above and it is the case of retrenchment. We are therefore not inclined to accept the argument advanced by the learned Counsel for Respondent company in this behalf.While considering compliance of above mentioned sections, we find that Respondent company has not come forward with clean hands and they have in fact resorted to the method of hide and seek. It was argued on behalf of the Respondent company that there were no proper pleadings on the part of the complainant union in this behalf. According to learned Counsel for the company Shri Cama, it was necessary for the complainant union to state specifically how and in respect of whom rule of last come first go is not followed. It was necessary for the complainant union to specifically plead that junior persons retained in the company and senior persons who have been retrenched were in fact of same ability, grade and skill and as such there was no reason for the company to deviate from Rule 25G. However, with due respect we disagree with this proposition of learned Advocate for the company as the same does not stand to reasons. The bear reading of Section 25G of Industrial Disputes Act shows that power is given to the employer to deviate from rule but at the same time the Section makes it obligatory that said deviation must be for reasons recorded by the employer. If such reasons are recorded by the employer and the same are made known to workmen then they will be in a position to say and point out as to whether the said reasons are correct or not or where the same have gone wrong, but when employer has utterly failed to fulfil the statutory obligation of recording reasons for deviation how one can expect the employees or workmen to plead anything in that behalf. In the instant case there is nothing on record to indicate that the employer while carrying out the process of retrenchment has in fact recorded any such reasons. A feeble attempt is made on the part of the learned Counsel for the company to show that employer is not bound to show the said reasons at the time of retrenchment but the same can be shown for the first time in the court of law. However, this proposition is also very difficult to swallow. If we strictly take into consideration the language of Section 25G, according to us it in fact presupposes recording of reasons whenever retrenchment is made by not following the rule and there is deviation. When we find that reasons are not at all given the question as to whether the same are valid and satisfactory or not in fact does not arise.The Respondent company has tried to place on record one list showing that at the end of such list reasons for deviation were given by the company. However, we find that the said list is in fact not duly proved by the companys witness and as such the same in fact cannot be read in evidence. There is absolutely not an iota of evidence on record to show that the company had in fact passed any specific order with regard to retrenchment of workers from different categories and from different sections and while deviating from Rule 25G recorded reasons for the same. While dealing with this aspect we may consider the evidence adduced by both the parties with regard to displaying of retrenchment notice and seniority list. Right from the beginning the complainant union had taken a stand that the company had never displayed the seniority list of different categories. However, it is the contention of the Respondent company that they had published such notice on the companys notice board onHowever, the complainant union has examined in all 9 witnesses and all of them have stated that at the relevant time they were working in the company and they used to pass by the side of the notice board but they never found any such seniority notice or list on the notice board as contended by the Respondent company. It is true that all these 9 witnesses have been retrenched and as such they may be called as interested persons. However, at the same time it must be noted that there is nothing in their cross examination which would indicate that they are not trustworthy. What is more to be noted is that if really the company had displaced the notice and the seniority list as contended by them onit could have very well examined atleast few workers from the company who have not been retrenched but company has not done so. Not only that but if we see the evidence of the general manager of the Respondent company then also we find that his evidence is very vague and he has in fact no personal knowledge about many things that were happening in the company. He said that at the relevant time franking machine was not in operation while from the evidence of Awatarkar on record it is very clear that the said franking machine was in working condition at that time. This also shows that in order to keep the proposed retrenchment secret the notices to workmen were sent by using other frankingis true that some complaint is lodged by the licensees who had taken the premises from the company but admittedly they were introduced in the premises for the first time onso this itself shows that the evidence adduced by the company to show that notice regarding retrenchment and seniority list were displayed on the notice board is not at all trustworthy. The learned trial Judge has considered entire evidence on this point minutely and has rightly held that evidence of the workers in this behalf is trustworthy and the evidence of Respondent company cannot be accepted and believed. So, he has recorded a finding of fact that no notice of retrenchment and seniority list were published by the company on the notice board onas contended by the Company. Naturally, there is no reason to interfere with the said finding of fact while exercising writproposition advanced by the learned Advocate for the Respondent company that manager can deviate from rule for valid and satisfactory reasons is not at all in dispute but in the instant case the management has miserably failed to show that when they deivated from the rule they recorded reasons for the same and the said reasons are valid and satisfactory. Similarly, even in J.K. Iron and Steel Co. V/s Its workmen AIR 1960 SC 1288   the Apex Court has observed that if the employer departs from the rule of last come first go, without any acceptable or sound reasoning, a tribunal will be well justified to hold that the action of the management is not bonafide. It must be noted that it is only in his written submissions the learned Counsel for the Respondent company has tried to give some reasons for deviation from rule but as pointed out by us above the company had in fact not come with clean hands on this point and the learned trial Judge has rightly observed that there is no convincing evidence to show that proper seniority lists were displayed and deviation from the rule was for not validthe said case is of no use to the present company because here the company has not at all in fact published the seniority list. Besides, they had also not made known to all the workers as to who are the persons who have actually been retrenched and what is their seniority. When there was nothing on record for the workmen to come to know that there is deviation from Rule 25G the question of having pleadings that deviation is malafide does not arise. In such a case when workmen plead that there is a breach of Section 25G the same is certainly sufficient. It is for the company to establish as to whether there is no deviation and if there is deviation it is for the valid reasons. As pointed out by the learned Advocate for the complainant Union even in a case Industrial Chemicals Ltd. V/s Labour Court 1976 LLJ Madras 137   it has been held that in case of departure from the rule of "last come first go" the employer must assign reasons for retrenching workmen from service and record them in the notice of retrenchment. This is not done by respondent company in present case. So, the above stated case is also of no use to the Respondent Company.However, the facts of these cases are quite different and they in fact do not support the case o the present Respondent company. For example, in the later case the Court observed that the complainant must set out in the first instance the deviation to show that the management has adopted unfair labour practice and only then the other side be asked to lead evidence to rebut the same. In the present case by specifically raising plea that provision of Section 25G of Industrial Dispute Act have been followed by the Respondent company, the complainant union had in fact laid foundation regarding their grievance. Thereafter it was necessary for the Respondent company to adduce sufficient evidence to rebut the same and show that provisions of section 25G of Industrial Disputes Act are complied. However, as mentioned above Respondent company did not adduce any satisfactory evidence and as a result of the same the learned trial Court held that there was breach of Section 25G of Industrial Disputes Act.33. At the cost of repetition it must be observed that in the instant case the Respondent company has failed to establish that for reasons recorded by them they deviated from Rule 25G. They failed to prove from the seniority list the retrenched workers and the reasons for retrenchment for particular workers. If the Respondent company had adduced such evidence then complainant union was bound to rebut the said evidence but as the Respondent company itself failed to mention the reasons for deviation the question of complainant union pleading that said deviation was not bonafide does not arose. Thus, after careful scrutiny of the entire evidence and position of law we have absolutely no hesitation to hold that in the instant case there was clear cut breach of Section 25G by the Respondent company.34. The learned trial Judge has specifically held that the Respondent company had in fact not published the notice as well as the seniority list on the notice board as contended by them. It is in fact established that defendant company had tried to keep every thing in secret and for that purpose only they had not displayed any notice of retrenchment on the notice board initially. They preferred to send the notices to the workers who were to be retrenched by RPAD. Though usually the letters from the company are sent after franking at the companys machine for the notices in question the said machines was not used and some different machines was used. That was obviously with a view that workers should not come to know early about the process of retrenchment. The learned trial Judge has rightly recorded the finding that 7 days notice as contemplated in Rule 81 of the Industrial Disputes (Bombay) Rule 1957 was not issued in the instant case. The said finding of fact is based on the evidence on record and proper appreciation of the same. We therefore feel that the same isas in the instant case there is clear cut breach of Section 25G of Industrial Dispute Act and Rule 81 of the Industrial Bombay Rule 1957, cumulative effect of the same is that action of retrenchment taken by the management is totally illegal and amounts to unfair labour practice.36. We are therefore of the view that the learned trial Judge has rightly declared that Respondent company has committed unfair labour practice under Item 9 of Schedule VI of the M.R.T Act 1971 by not displaying the seniority list as provided in Rule 81 of Industrial Disputes (Bombay) Rules 1957 at the time of retrenching workers and by committing breach of Section 25G of Industrial Disputes Act by not following the Rule of lst come first go and for not recording the reasons for deviation from the said Rule. The order passed by the learned Member, Industrial Court was legal and correct and therefore, the learned single Judge of this Court rejected the writ petition filed by the Respondent company. Thus, there is no substance in this appeal.