Case: Management Of Gordon Woodrofe Agencies Pvt. Ltd Vs. S Presiding Officer, Principal Labour Court &amp; Others

the Labour Court came to be dismissed by the learned Single Judge.9. In an appeal filed before the Division Bench of the said High Court by both the parties, the Division Bench agreed with the Labour Court and the Single Judge by upholding the finding as to the legality of the closure of the establishment as also in regard to the payment of ex gratia compensation in addition to the compensation legally payable to the respondent workmen. 10. It is in the above factual background the appellant-management is before us questioning the validity of the direction to pay additional ex gratia compensation as awarded by the trial court. 11. Mr. R. Sundervardham, learned senior counsel appearing for the appellant, submitted that once the Labour Court came to the conclusion that the closure in question was legally justifiable and bona fide and also having come to the conclusion that the appellant had offered the compensation and other legal dues to the workmen concerned promptly, it was not open to the Labour Court to have directed additional ex gratia payment which is not contemplated under the provisions of the Act on the basis of the principle of social justice. He submitted that apart from the Labour Court even the learned Single Judge and the Division Bench of the High Court also fell in error in confirming that part of the award of the Labour Court which directed the payment of such unjustified ex gratia amount. In support of this contention, he relied on two judgments of this Court in the case of M/s. Om Oil and Oil Seeds Exchange Ltd., Delhi vs. Their Workmen (AIR 1966 SC 1657 ) and N.S. Giri vs. The Corporation of City of Mangalore and others (AIR 1999 SC 1958 ). 12. In reply, Mr. S.S. Dahiya, learned counsel appearing for the respondents, contended that the courts below were justified in taking into consideration the plight of the workmen who have been thrown out of employment in mid-stream of their lives. He also contended that it was the legal responsibility of the appellant to have absorbed these workmen in suitable posts in its sister company, namely, Gordon Woodroffe Ltd. which as a matter of fact, was one of the service conditions applicable to the workmen. He also tried to contend that the closure itself was illegal and was for collateral reasons. 13. Having heard the learned counsel for the parties and perused the records, we are satisfied that so far as the legality and genuineness of the closure is concerned, the Labour Court after considering the evidence brought on record has given a conclusive finding in favour of the appellant which finding has been confirmed by the learned Single Judge as well as the Division Bench of the High Court and the same has become final. Therefore, we will have to consider whether consequent to such finding of the Labour Court, it can direct payment of further compensation over and above what is contemplated under the Act. The answer to this question is found in the two judgments relied on by learned counsel for the appellant before us. In the case of M/s. Om Oil and Oil Seeds Exchange Ltd. (supra), this Court held: "... If the management was entitled to retrench 30 workmen and did so after paying wages for the period of notice and retrenchment compensation, we fail to appreciate the grounds on which an order of payment of 50 per cent of the wages in addition to retrenchment compensation may be made. Retrenchment compensation is paid as solatium for termination of service resulting in unemployment, and if that compensation be paid there can be no ground for awarding compensation in addition to statutory retrenchment compensation. If the Industrial Tribunal comes to the conclusion that an order of retrenchment was not properly made, and the Tribunal directs reinstatement an order for payment of remuneration for the period during which the employee remained unemployed, or a part thereof may appropriately be made. There is because the employee who had been retrenched for no fault of his had been improperly kept out of employment, and was prevented from earning his wages. But where retrenchment has been properly made and that order has not been set aside, we are not aware of any principle which may justify an order directing payment of compensation to employees properly retrenched in addition to the retrenchment compensation statutorily payable." 14. In our opinion, the ratio laid down in the above case clearly applies to the facts of this case. In the instant case also, the Labour Court came to the conclusion that the closure of the establishment was legally justifiable and the management had a required under the law, offered apart from the compensation payable for the closure, all other statutory dues which some of the employees collected without demur and in the case of respondent-workmen even though the same were offered on time, they did not accept it, therefore, the question of paying any additional ex gratia compensation which is not contemplated under the statue, does not arise. This Court in the case of N.S. Giri (supra) held : "An award under the Industrial Disputes Act cannot be inconsistent with the law laid down by the Legislature or by the Supreme Court and if it does so, it is illegal and cannot be enforced." Thus, it is clear from the pronouncements of this Court that the Labour Court or for that matter the High Court had no authority in law to direct payment of any additional sum by way of ex gratia payment otherwise than what is provided under the statute when the act of the management in closing down the establishment is found to be valid and all legally payable amounts have been paid or offered in time. In such a situation, contrary to the statute, the principle of social justice cannot be invoked since the Legislature would have already taken note of the same while fixing the compensation payable.

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

Explanation:
1[ds]13. Having heard the learned counsel for the parties and perused the records, we are satisfied that so far as the legality and genuineness of the closure is concerned, the Labour Court after considering the evidence brought on record has given a conclusive finding in favour of the appellant which finding has been confirmed by the learned Single Judge as well as the Division Bench of the High Court and the same has become final. Therefore, we will have to consider whether consequent to such finding of the Labour Court, it can direct payment of further compensation over and above what is contemplated under the Act. The answer to this question is found in the two judgments relied on by learned counsel for the appellant before us. In the case of M/s. Om Oil and Oil Seeds Exchange Ltd. (supra), this CourtIf the management was entitled to retrench 30 workmen and did so after paying wages for the period of notice and retrenchment compensation, we fail to appreciate the grounds on which an order of payment of 50 per cent of the wages in addition to retrenchment compensation may be made. Retrenchment compensation is paid as solatium for termination of service resulting in unemployment, and if that compensation be paid there can be no ground for awarding compensation in addition to statutory retrenchment compensation. If the Industrial Tribunal comes to the conclusion that an order of retrenchment was not properly made, and the Tribunal directs reinstatement an order for payment of remuneration for the period during which the employee remained unemployed, or a part thereof may appropriately be made. There is because the employee who had been retrenched for no fault of his had been improperly kept out of employment, and was prevented from earning his wages. But where retrenchment has been properly made and that order has not been set aside, we are not aware of any principle which may justify an order directing payment of compensation to employees properly retrenched in addition to the retrenchment compensation statutorily payable.In our opinion, the ratio laid down in the above case clearly applies to the facts of this case. In the instant case also, the Labour Court came to the conclusion that the closure of the establishment was legally justifiable and the management had a required under the law, offered apart from the compensation payable for the closure, all other statutory dues which some of the employees collected without demur and in the case of respondent-workmen even though the same were offered on time, they did not accept it, therefore, the question of paying any additional ex gratia compensation which is not contemplated under the statue, does not arise. This Court in the case of N.S. Giri (supra) held : "An award under the Industrial Disputes Act cannot be inconsistent with the law laid down by the Legislature or by the Supreme Court and if it does so, it is illegal and cannot be enforced." Thus, it is clear from the pronouncements of this Court that the Labour Court or for that matter the High Court had no authority in law to direct payment of any additional sum by way of ex gratia payment otherwise than what is provided under the statute when the act of the management in closing down the establishment is found to be valid and all legally payable amounts have been paid or offered in time. In such a situation, contrary to the statute, the principle of social justice cannot be invoked since the Legislature would have already taken note of the same while fixing the compensation payable.