Case: Vijay Kumar Agarwal Vs. National Textile Corporation (South Maharashtra) Limited

employees of the undertaking, The Elphinstone Spinning and weaving Mills Co. Ltd. , Elphinstone Road, Bombay. (7) OUR attention has also been drawn to a recent decision of the Supreme Court in National textile Corporation Ltd. v. Sitaram Mills Ltd. , reported (AIR) 1986 S. C. 1234. In the said reported decision sub-section (2) of Section 3 of the Textile Undertaking (Taking Over of management) Act, 1983, was given a wider meaning to include a piece of land upon which the textile company had erected Industrial galas for sale for the purpose of utilisation of their sale proceed for running the textile undertaking. Emphasis was laid upon the interpretation of the Act in a manner which would subserve and carry out its purpose and object. This decision also supports the contention made on behalf of the petitioners that they were employed in the registered office which was necessary for carrying out the work of the textile undertaking taken over under the Act and, therefore, by operation of law they had continued to be the employees of the said undertaking. (8) MR. Shrikrishna, the learned counsel appearing on behalf of respondent No. 1 has strenuously urged before us that in the facts of this case, the petitioners cannot be deemed to be continued in the employment and cannot be deemed to be any longer employees of the undertaking managed by respondent No. 1 because according to respondent No. 1, the petitioners have continued to work for the respondent. This contention is seriously disputed by the petitioners. It is unnecessary for us to undertake a prolonged trial to satisfactorily resolve this issue. One facet of this question is that even if the petitioners continued after the appointed day as the employees of the undertakings, they were disentitled from receiving their pay during the period they were allegedly serving with respondent No. 2 or any other third party. Since we do not propose to make any other directing the respondent No. 1 to pay any specific sum, it is unnecessary for us to decide whether with effect from December, 1983 full wages should be paid to each one of the petitioners. In appropriate forum such a claim for payment of the said alleged arrears of pay can be made by the petitioners and it would be open to respondent No. 1 to take appropriate defence as regards its liability to pay to the petitioners full or proportionate amount of pay. (9) WE are now unable to allow respondent No. 1 to urge that after the appointed day the petitioners had abandoned and/or left their employment in the undertaking in question. In the first place, such a plea of abandonment or termination by reason of the petitioners allegedly accepting employment elsewhere was not taken in the affidavit-in-reply. Mr. Shrikrishna, the learned counsel, appearing for respondent No. 1 drew our attention to certain annexures to the affidavit-in-reply affirmed by Basant Kumar Kedia on behalf of respondent No. 1. Reliance was also sought to be placed upon the averments and in some of the paragraphs of the said affidavit-in-reply. We are not unmindful of the fact that in paras 3 to 6 of the affidavit-in-reply the deponent had submitted that the petitioners services had come to an end. In our view, such a plea of abandoning or voluntarily giving up of the services by the petitioners would not arise because of the fact that respondent No. 1 had persistently denied employment to the petitioners after the appointed day. Series of letters and representations, copies of which have been annexed to the petition, were submitted by the petitioners, No written reply was given on behalf of respondent No. 1 till the attorney for respondent No. 1 by letter dated February 7, 1986, denied justice to the petitioners. In the said letter significantly, the plea taken on behalf of respondent no. 1 was that the contracts of the petitioners were deemed to have been terminated under the provisions of the Taking Over of Management Act. No assertion, however, has been made on behalf of respondent No. 1 that inspite of the offer made by respondent No. 1 the petitioners had declined to serve in the undertaking. If respondent No. 1 refused to employ the petitioners who repeatedly had offered their services, assuming that the petitioners had received remuneration from any other source, the same by no stretch of imagination can be treated as intentionally and voluntarily giving up of their employment with respondent No. 1. (10) BEFORE we conclude, we may refer to another important factor. The textile company along with several other textile companies had filed writ petition in this Court challenging the vires of the Taking Over of the Management Act being Writ Petition No. 2401 of 1983. So far as the elphinstone Spinning and Weaving Mills Co. Ltd. , was concerned, the rule was made absolute. The National Textile Corporation Ltd. , has filed an appeal in the Supreme Court against the said decision and the same is pending. We understand that during the pendency of the writ petition in this Court in Textile Company was allowed to occupy in its registered office two rooms. The supreme Court has passed an order on the footing that the impugned Taking Over Act was valid and that the assets of the textile undertakings, belonged to the owners, came to be vested in the central Government on the undertakings being taken over. In the above view, we have also decided this writ petition on the footing that the impugned Taking Over Act is valid and the assets of the textile undertaking in questions had vested in the Central Government and that the central Government has transferred the same for the management by respondent No. 1. We may also note that by interim order the Supreme Court has directed the National Textile Corporation to take over along with several other assets the office premises of the textile company. The same is obviously subject to final decision in the appeal.

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

Explanation:
1[ds]We understand that the appellant Corporation has preferred an appeal in the Supreme Court against the decision in Appeal No. 177 of 1986 and the same is still pendingUntil the Supreme Court takes a contra view, the decision of this court cited hereinbefore is binding upon us and it is not open to take a contrary view regarding the effect of taking over of management of textile undertakings under the aforesaid Act. For the same reason we are unable to give any countenance to the submission make on behalf of respondent No. 1 that by operation ofn (3) and (4) of Section 4 of the Taking Over of management Act, 1983, all contracts including the contract of the employment stood terminated on the appointed day and the petitioners shall be deemed to have vacated their posts. As already mentioned, these contentions cannot be accepted in view of the decision of this Court which constituted binding precedents. There is considerable substance in the submission made on behalf of the petitioners that by Section 13 of the Taking Over of Management Act the undertaking having vested in the Central Government, the custodian gets the power to terminate the contract of employment. The legal implication was that unless terminated, contract of employment in relation to the textile undertakings subsisting on the appointed day continued. In the instant case no termination of the contract of employment of the petitioners having been made, they have continued as employees of the undertaking, The Elphinstone Spinning and weaving Mills Co. Ltd. , Elphinstone Road, BombayThis decision also supports the contention made on behalf of the petitioners that they were employed in the registered office which was necessary for carrying out the work of the textile undertaking taken over under the Act and, therefore, by operation of law they had continued to be the employees of the said undertakingThis contention is seriously disputed by the petitioners. It is unnecessary for us to undertake a prolonged trial to satisfactorily resolve this issue. One facet of this question is that even if the petitioners continued after the appointed day as the employees of the undertakings, they were disentitled from receiving their pay during the period they were allegedly serving with respondent No. 2 or any other third party. Since we do not propose to make any other directing the respondent No. 1 to pay any specific sum, it is unnecessary for us to decide whether with effect from December, 1983 full wages should be paid to each one of the petitioners. In appropriate forum such a claim for payment of the said alleged arrears of pay can be made by the petitioners and it would be open to respondent No. 1 to take appropriate defence as regards its liability to pay to the petitioners full or proportionate amount of payWe are not unmindful of the fact that in paras 3 to 6 of they the deponent had submitted that the petitioners services had come to an end. In our view, such a plea of abandoning or voluntarily giving up of the services by the petitioners would not arise because of the fact that respondent No. 1 had persistently denied employment to the petitioners after the appointed day. Series of letters and representations, copies of which have been annexed to the petition, were submitted by the petitioners, No written reply was given on behalf of respondent No. 1 till the attorney for respondent No. 1 by letter dated February 7, 1986, denied justice to the petitioners. In the said letter significantly, the plea taken on behalf of respondent no. 1 was that the contracts of the petitioners were deemed to have been terminated under the provisions of the Taking Over of Management Act. No assertion, however, has been made on behalf of respondent No. 1 that inspite of the offer made by respondent No. 1 the petitioners had declined to serve in the undertaking. If respondent No. 1 refused to employ the petitioners who repeatedly had offered their services, assuming that the petitioners had received remuneration from any other source, the same by no stretch of imagination can be treated as intentionally and voluntarily giving up of their employment with respondent No. 1(10) BEFORE we conclude, we may refer to another important factor. The textile company along with several other textile companies had filed writ petition in this Court challenging the vires of the Taking Over of the Management Act being Writ Petition No. 2401 of 1983. So far as the elphinstone Spinning and Weaving Mills Co. Ltd. , was concerned, the rule was made absolute. The National Textile Corporation Ltd. , has filed an appeal in the Supreme Court against the said decision and the same is pending. We understand that during the pendency of the writ petition in this Court in Textile Company was allowed to occupy in its registered office two rooms. The supreme Court has passed an order on the footing that the impugned Taking Over Act was valid and that the assets of the textile undertakings, belonged to the owners, came to be vested in the central Government on the undertakings being taken over. In the above view, we have also decided this writ petition on the footing that the impugned Taking Over Act is valid and the assets of the textile undertaking in questions had vested in the Central Government and that the central Government has transferred the same for the management by respondent No. 1. We may also note that by interim order the Supreme Court has directed the National Textile Corporation to take over along with several other assets the office premises of the textile company. The same is obviously subject to final decision in the appeal.