Case: CHAIRMAN AND MANAGING DIRECTOR THE FERTILIZERS AND CHEMICALS TRANVANCORE LTD Vs. GENERAL SECRETARY FACT EMPLOYEES ASSOCIATION

4. The appellants herein are the respondents and the respondents herein (respondent Nos.1-10) are the writ petitioners of the writ petitions, out of which these appeals arise.      5. Appellant No.1 is a Public Sector Undertaking and engaged in the business of manufacture and sale of various kinds of fertilizers and chemicals. It has a factory at Travancore in the State of Kerala. Respondent Nos.1 to 10 are the Trade Unions of the workers working in the manufacturing unit of appellant No.1 at the relevant time.      6. On 23.01.1978, a Memorandum of Settlement was executed between appellant No.1 (PSU) and respondent Nos.1 to 10, i.e., (Trade Unions) wherein it was inter alia agreed between the parties that the existing superannuation age of 60 years will remain unchanged in respect of all the workers working in the appellants Undertaking at Udyogamandal Division, Head Office including those who are on the rolls of the Undertaking as on the date of settlement.      7. It was also agreed that those who are recruited on and after Memorandum of Settlement in question shall retire on attaining the age of 58 years.      8. On 19.05.1998, the Central Government issued a direction to all the Public Sector Undertakings of the Central Government and directed them to increase the age of superannuation upto below board-level employees from 58 years to 60 years. This was made compulsory to all the PSUs. Appellant No.1 accordingly ensured its compliance and made it applicable to their employees by a resolution dated 27.05.1998.      9. Since the financial condition of the appellant (PSU) was deteriorating day-by-day, it had become difficult for them to give effect to the aforesaid decision/direction. The appellant (PSU), therefore, brought this fact to the notice of the Central Government. By letters dated 02.09.1999 and 11.07.2001, the Central Government directed the appellant (PSU) to take several measures to improve their financial performance and also undertake the work of rationalization of their workers and bring it to a manageable level. This included lowering of the age of retirement of the employees. After extensive deliberations and making several efforts for reducing the financial losses, the Central Government eventually by letter dated 25.04.2003 directed the appellant (PSU) to change the retirement age of pre-1978 employees from 60 years to 58 years. In compliance with the letter dated 25.04.2003 of the Central Government, the appellant(PSU) issued an order dated 29.04.2003 to reduce the retirement age of pre-1978 employees from 60 years to 58 years.      10. This gave rise to filing of the original petitions by the respondents (Trade Unions) in the Kerala High Court (OP Nos.14598, 14599 & 14976/2003) challenging therein the legality and correctness of the order dated 29.04.2003.      11. The Single Judge by order dated 12.08.2003 upheld the order dated 29.04.2003 and dismissed the original petitions. The Single Judge inter alia held that first, the appellant (PSU) was facing acute financial crisis and hence to improve the financial crisis some positive action was also taken for the survival of the appellants industry; Second, the Trade Unions had agreed vide settlement dated 28.08.2001 that having regard to the emergent situation which had arisen, the employment strength was reduced by 20% to save the industry; Third, there did not appear any justifiable reason to retain the retirement age of 60 years only to pre-1978 employees; Fourth, the decision to reduce the retirement age was not violative of Article 14 of the Constitution inasmuch as it was done to make the retirement age uniform to all the workers with a view to save the industry; and Fifth, if it had not been done, it would have been impossible to continue with the existing industry. (See Paras 11 and 12 of the order of the Single Judge). However, in the concluding Para, the Single Judge observed that it shall be open to the writ petitioners to work out their other remedies available in law.      12. The respondents (Trade Unions) felt aggrieved and carried the matter in intra court appeal (WA Nos. 1565,1595, 2112 & 2113/2003) before the Division Bench. By order dated 18.12.2003, the Division Bench dismissed the appeals and affirmed the order of the Single Judge. The Division Bench inter alia held that, first, the acceptance of the demand raised by about 10% of the total employees is likely to affect adversely the interest of about 90% of the employees; Second, the appellant (PSU) was facing acute financial crisis and, therefore, having regard to the totality of the circumstances, there are no grounds to interfere; Third, clause 14 of the Memorandum of Settlement provided that the dispute arising between the parties in relation to the settlement should be resolved by means of arbitration, i.e., by the Labour Commissioner and the same having been entertained by the Labour Commissioner, the same be pursued. (See Para 8 of the order of the Single Judge).      13. The Trade Unions (respondents) felt aggrieved and filed special leave petitions (CC Nos.3653-3655/2004) in this Court. By order dated 23.04.2004, this Court dismissed the SLPs.      14. It is with this background, the State Government by order dated 18.05.2004 as amended by GO dated 22.01.2008, made the following industrial reference (No.10/2004) at the instance of the Trade Unions to the Labour Court, Ernakulum to decide the followingthe action of the management of FACT, Ltd. Udyogamandal in having reduced the age of superannuation of pre 1978 workers from 60 years to 58 years is justifiable or not??      ?If not, what relief the workmen are entitledThe State Government also made another reference (No.4/2005) at the instance of the Trade Unions by order dated 02.03.2005 to the Labour Court to decide the followingthe action of the management of FACT, Ltd. Udyogamandal Ltd. terminating the service of 42 workmen is justifiable or not? If not, what relief the workmen are entitledThe Labour Court, by award dated 02.07.2008 answered the reference (No.10/2004) against the Trade Unions and in favour of the appellant(PSU). It was held that since the question referred to the Labour Court in the reference was already dealt with in the earlier round of litigation by the High Court and the Supreme Court and the same having attained finality consequent upon the dismissal of the SLPs by this Court by order dated 23.04.2004, the reference made by the State was barred by the principle of res judicata. So far as the other reference (No.4/2005) was concerned, it was accordingly disposed of by award dated 02.08.2008 on the same lines.      17. The Trade Unions/employees (respondents herein) felt aggrieved and filed the writ petitions (Nos.33938/2008 and 2556/2009) in the High Court of Kerala against the award dated 02.07.2008.      18. The Single Judge by order dated 21.08.2012 allowed the writ petitions and quashed the awards dated 02.07.2008 and 02.08.2008 of the Labour Court. It was held that the reference made by the State to the Labour Court was not barred by res judicata. The Single Judge then awarded 30% of the wages payable to each employee instead of granting them a relief of reinstatement in service.      19. The appellant (PSU) felt aggrieved and filed intra court appeals. The Division Bench by impugned order dismissed the appeals and upheld the order of the Single Judge, which has given rise to filing of the present appeals by the appellant(PSU) after obtaining the special leave to appeal from this Court.

Reasoning:
22. Having heard the learned counsel for the parties and on perusal of the record of the case including the written submissions, we are inclined to allow these appeals and while setting aside the impugned order restore the awards dated 02.07.2008 and 02.08.2008 of the Labour Court.In our considered view, the question, as to whether the principle of res judicata defined in Section 11 of the Code of Civil Procedure, 1908 (hereinafter referred to as ?the Code?) applies to the labour proceedings or not, remains no more res integra and stands answered by three decisions of this Court.Now coming to the facts of this case, it is not in dispute that the issue in relation to reduction of age from 60 to 58 years was raised by the Trade Unions/Respondents in the first round of litigation by filing the original petitions (O.P. Nos.14598, 14599 & 14976/2003) in the Kerala High Court. These writ petitions were dismissed by the Single Judge on merits by order dated 12.08.2003. The respondents/Trade Unions then carried the issue in intra court appeals (No.1565, 1595, 2112 & 2113/2003) before the Division Bench. The appeal was dismissed by the Division Bench by order dated 18.12.2003. The Trade Unions/respondents then filed special leave to appeals in this Court and by order dated 23.04.2004, this Court dismissed the SLPs and affirmed the order of the Division Bench.In our view, the effect of passing of these orders was that the issue in relation to reduction of age from 60 to 58 years including all incidental issues arising therefrom, attained finality because they were already decided on the merits between the parties to the Lis.In our opinion, no judicial forum at the instance of any party to the Lis had jurisdiction to try these issues again on its merits. It was barred for being tried again by virtue of principles of res judicata contained in Section 11 of the Code, which has also application to the labour/industrial proceedings.In our opinion, the State had, therefore, no jurisdiction to make a reference(s) to the Labour Court under Section 10 of the ID Act to re-examine the question of age reduction made by the appellant(PSU). A fortiori, the Labour Court had no jurisdiction to entertain the reference(s) to adjudicate the question(s) referred in the reference(s).In view of the foregoing discussion, we are of the considered opinion that the High Court was not justified in setting aside the awards of the Labour Court, which had rightly held that it (Labour Court) had no jurisdiction to entertain the reference and nor it had the jurisdiction to answer it on merits. The High Court should have upheld the awards of the Labour Court.