Case: M/s. Ariane Orgachem Pvt. Ltd Vs. Wyeth Employees Union &amp; Others

3. Since both the appeals are filed against the common impugned judgment and order of the High Court, for the sake of convenience, we would refer to the brief facts of C.A.No.246 of 2009 which are stated hereunder:The appellant-Company, M/s. Ariane Orgachem Pvt. Ltd. was established to manufacture and market drugs which are manufactured by it. The appellant-Company, have taken over the alleged loss incurring pharmaceutical factory of M/s. Wyeth Ltd. respondent No.3 herein (appellant-Company in C.A.247 of 2009), situated at 146, LBS Marg, Ghatkopar, Mumbai, along with its permanent employees, pursuant to an agreement dated 25.6.2004 and the sale deed dated 30.6.2004. The letters were issued to the workmen by the appellant in this regard, to the effect that they would be employed under its management without any interruption in their services.4. On 30.08.2004, the appellant-Company acquired the erstwhile manufacturing facility of M/s. Wyeth Ltd.-respondent No.3 and on 31.8.2004, the respondent No.3 issued letters to its workmen working in its erstwhile factory, informing them about the sale and transfer of the ownership and management of the said factory to the appellant-Company in accordance with the provision of Section 25-FF of the Act. They were further informed that their services will not be interrupted due to such transfer and their services will be treated as continuous and uninterrupted for the purpose of retiral/terminal benefits. Thereafter, all the workmen whose employment came to be transferred from M/s Wyeth Ltd. to the appellant-Company started drawing their wages/salary and all other benefits like advance, LTA and leave, etc. from the appellant.5. On 2.9.2004, the respondent no.1-Wyeth Employees Union (for short, which is the recognized Union under the Provisions of the Maharashtra Recognition of Trade Unions and Prevention of Unfair Labour Practices Act, 1971 (for shortMRTU & PULPfiled Complaint (ULP) No. 534 of 2004, before the Industrial Court challenging the sale and transfer of employment of the employees but no interim relief was granted by the Industrial Court, hence, all the workmen came on the rolls of appellant-Company and started drawing wages from it.6. The appellant claimed that it has framed Voluntary Retirement Scheme (for shorton 12.4.2005 for the workmen, offering amounts, tax free, to each workman with all other dues such as gratuity, ex-gratia, provident fund, leave encashment etc. which was operative from 12.4.2005 to 30.4.2005. On 15.04.2005, 45 out of the total 143 workmen applied for the said VRS and collected the VRS payments and the remaining workmen collected the VRS payments on 20.04.2005 and 21.04.2005. After the payment of the VRS benefits, the workmen were relieved from their services by the appellant-Company.7. It is further stated by the appellant-Company that on 26.4.2005, the first respondent-Union through its General Secretary, unconditionally withdrew Complaint (ULP) Nos. 534 of 2004, 714 of 2004 and 771 of 2004, confirming to the court that all the workmen had availed the VRS and the Union did not want to pursue the cases.8. After several months of accepting the VRS, the respondent-Union raised the demand seeking their reinstatement in the Company of respondent no.3. In response to the said demand, the appellant-Company replied that all the workmen had taken the VRS benefits and they were not the workmen of either the appellant-Company or the thirdCompany anymore, therefore, no industrial dispute could be raised by or on their behalf by the respondent-Union. On 12.12.2005, the respondent-Union, wrote a letter to the Assistant Commissioner of Labour, seeking his intervention in respect of their demand with the Company. On 01.08.2006, the Conciliation Officer sent the failure report to the Assistant Commissioner of Labour, subsequent to which on 14.08.2006, the office of the Deputy Labour Commissioner which took cognizance of the failure report declined to make an order of reference to the Industrial Tribunal stating thereby that there was no industrial dispute in existence between the parties.9. Thereafter, the newly elected leadership of the first respondent-Union under the representation of its new General Secretary aggrieved by the order of refusal to make an order of reference to the Industrial Tribunal by the Deputy Commissioner of Labour filed Writ Petition No. 444 of 2007 before the High Court urging various legal grounds and questioning the correctness of the same.10. The High Court in exercise of its power quashed the order dated 14.8.2006 passed by Deputy Commissioner of Labour, Mumbai, who has refused to make an order of reference to the Industrial Tribunal for its adjudication of the industrial dispute between the parties. The High Court has held that the acceptance of the benefits by the concerned workmen from the appellant may not establish the fact that no force or compulsion was exercised by the appellant and this is the most contentious and disputed question of fact which could not have been decided by the State Government in exercise of its administrative power. The High Court has held that the subjective satisfaction of the subject matter of an industrial dispute between the parties by the State Government is therefore, vitiated in law and making an order of reference in respect of the concerned workmen is absolutely essential in this regard. Thus, the High Court by issuing a writ of mandamus, directed the Deputy Labour Commissioner to make an order of reference to the Industrial Tribunal with regard to the demand of industrial dispute raised by the Union dated 14.11.2005 on behalf of the concerned workmen, for its adjudication under Section 10(1)(d) of the Act. Aggrieved by the impugned judgment of the High Court, these appeals have been filed by the appellant-Companies, praying this Court to set aside the same contending that the High Court has exceeded its jurisdiction in passing the impugned judgment and order.

Reasoning:
It is an undisputed fact that the concerned workmen are the employees of M/s Wyeth Ltd. who is the respondent no.3 herein and the appellant in the connected appeal. The contention urged by the learned senior counsel on behalf of theis that the alleged transfer of the undertaking of M/s Wyeth Ltd. in favour of theis not a genuine transfer and it is a sham one, as it is a transfer of the assets of the Company only not the transfer of business of M/s Wyeth Ltd. Therefore, the same is not in conformity with the provisions of Section 25FF of theconclusion arrived at by the High Court is supplemented with the reasons arrived at by this Court. Therefore, quashing of the order of refusal to make an order of reference by the High Court is perfectly legal and valid which need not be interfered with by this Court in exercise of itsfact that certain documents were sought to be summoned at the instance of firstduring the conciliation proceedings from theby the Conciliation Officer which were not produced by it is one more important factor which is required to be considered by the Industrial Tribunal under Section 10(1)(d) read with the Third Schedule of the Act in exercise of its original jurisdiction to resolve the disputed questions of fact. Further, the VRS produced on record by the Management gives it the discretion to arbitrarily fix the compensation varying from Rs.50,000/, which if proved, would be considered as arbitrary and there would be a grave miscarriage of justice to the concerned workmen. This aspect of the matter has been ignored by the Deputy Labour Commissioner, who has erroneously refused to make an order of reference to the Industrial Tribunal for its adjudication of the existing industrial dispute.Having regard to the facts and circumstances of the case and the contentions urged on behalf of the learned counsel for the parties, we have come to the conclusion that these are the disputed questions of fact in this case, which requires determination on the basis of evidence by the Industrial Tribunal and therefore, a valid reference has to be made to it by the State Government. The various decisions relied upon by the learned senior counsel Mr. C.U. Singh on behalf of the appellant referred to supra are misplaced and have no application to the fact situation of the presentis no other notification produced by the employer either before the High Court or this Court to show that the Deputy Labour Commissioner has got power as the delegatee of the State Government to make an order of reference under the provisions of Section 10(1)(d) read with the Third Schedule of the Act to the Industrial Tribunal. On this ground also, the order of the Deputy Labour Commissioner, refusing to make an order of reference regarding the industrial dispute of the concerned workmen is vitiated in law, as the same is void ab initio in law and therefore, quashing of the said refusal order by the High Court is perfectly justified.29. Thehas also contended that thehas also raised the legal question regarding the competency of the Deputy Labour Commissioner in passing the order of reference for the first time before this Court and the same was not raised before the High Court, therefore, the same shall not be permitted to be raised in these proceedings and this Court need not go into this aspect of the matter which is wholly untenable in law.The conclusion arrived at by the High Court that the order of refusal to make an order of reference of the existing industrial dispute to the Industrial Tribunal by the Deputy Commissioner of Labour is bad in law and it has rightly issued the writ of mandamus to the State Government and the Deputy Commissioner of Labour for the reason that the employer has been litigating the matter before the High Court for several years and the High Court, based on the pleadings and evidence on record, must have felt that the disputed questions of fact pleaded by the parties warrant the adjudication of the dispute effectively by the Industrial Tribunal. Therefore, we do not find any reason to set aside the order of writ of mandamus issued by the High Court to the State Government represented by the Deputy Labour Commissioner.Hence, in our considered view the impugned judgment and order passed by the High Court is perfectly legal and valid and the same does not call for interference by this Court except with certain modification in the operative portion of the order of the High Court, namely, with regard to the direction given to the State Government represented by the Deputy Labour Commissioner which is not in accordance with the notification referred to supra. The said direction has to be given to the Additional Labour Commissioner (in accordance with the Notification dated 09.08.2003) to make an order of reference to the Industrial Tribunal within six weeks from the date of receipt of the copy of this order as the matter has been pending at the reference making stage itself for several years at the instance of theand the respondent no.3 herein.