NATIONAL KAMGAR UNION versus KRAN RADER PVT. LTD. & ORS.
[2018] 1 S.C.R. 74, Supreme Court of India, 2018
Outcome: Disposed off
Segment: Ratio
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NATIONAL KAMGAR UNION
v.
KRAN RADER PVT. LTD. & ORS.
(Civil Appeal No. 20 of 2018)
JANUARY 05, 2018
[R. K. AGRAWAL AND ABHAY MANOHAR SAPRE, JJ.]
Industrial Disputes Act, 1947– Chapter VB – s.25K –
Applicability of – Closure of manufacturing unit by factory owner
– Issuance of closure notice by the owner – Complaint by appellant-
Union against the factory owner – Industrial Court held the closure
illegal since 115 workers were found working at the relevant time
and s.25K was not complied with while effecting the closure of the
unit – However, High Court held that 99 workers were found
working in the Unit at the relevant time, thus, compliance of s.25K
while declaring the closure not required – Interference with – Held:
Reasoning assigned by the High Court is just and reasonable, thus,
does not call for interference – Total strength of workers employed
at the relevant time in Unit was 99 and that the status of 16 disputed
employees could not be conclusively proved to be that of a
“workman” – Appellant in order to prove the status of 16 employees,
did not adduce any cogent evidence as against the evidence of the
factory owner, thus, it was not possible for this Court to hold that
the finding of the High Court is wholly arbitrary or illegal or against
the evidence – Since the strength of workers was below 100, it was
not necessary for the factory owner to ensure compliance of
Chapter VB – s.25-K had no application to
respondent No.1 – Thus,
it is just and proper to award in lump sum a compensation of
Rs.2,50,000/- to each worker who did not accept the compensation,
after making proper verification – Maharashtra Recognition of
Trade Unions and Prevention of Unfair Labour Practices Act, 1971
– s.28 – Sch. IV Items 9, 10.
Constitution of India – Art. 136 – Appeal under – Question
of fact – Held: Is to be decided by the Courts on appreciation of
evidence adduced by the parties – Once the Courts record a finding
on such question, be that of concurrence or reversal, the finding is
usually held binding on this Court – Only when such finding is
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found to be against any provision of law or evidence or is perverse,
it would not be held binding on the superior Court – Even if the
question raised is one of the mixed question of fact and law, this
Court would not readily interfere with the conclusion unless it is
manifestly or obviously erroneous.
Art. 227 – Supervisory jurisdiction – Exercise of – When –
Held: While recording a finding, if it is noticed by the High Court
that the subordinate Court has failed to take into consideration the
material evidence or recorded a finding without there being any
evidence, then the High Court would be entitled to interfere in such
finding in exercise of its supervisory jurisdiction u/Art. 227.
Disposing of the appeal, the Court
HELD: 1.1 There is no good ground to interfere in the
impugned judgment of the High Court. The reasoning assigned
by the High Court appears to be just and reasonable calling no
interference. [Para 13][81-A]
1.2 If the strength of the workers was above 100 at the
relevant time, in that event, the provisions of Section 25-K of
the Industrial Disputes Act, 1947 were applicable to respondent
No.1 whereas if the strength was below 100, in such event, the
provisions of Section 25K had no application. In the case of former,
the appellant-Union succeeds and in the case of later, respondent
No.1 succeeds. [Para 15][81-C-D]
1.3 The question as to what is the total strength of the
workers employed in the Unit or, in other words, how many
workers were
working in a particular unit is essentially a question
of fact. Such question is required to be decided by the Courts on
appreciation of evidence adduced by the parties. Once the Courts
record a finding on such question, be that of concurrence or
reversal, the finding is usually held binding on this Court while
hearing the appeal under Article 136 of the Constitution. It is
only when such finding is found to be against any provision of law
or evidence or is found to be wholly perverse to the extent that
no average judicial person could ever record such finding, it would
not be held binding on the superior Court.[Paras 17-19][81-E-G]
1.4 The question as to what is the status of a “workman”, it
has to be inferred as a matter of law from facts found and if the
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question involved is one of drawing a legal inference as to the
status of a party from facts found, it is not a pure question of fact.
It is held that if the inference drawn by the tribunal in regard to
the status of the workman involved the application of certain legal
tests, it necessarily becomes a mixed question of fact and law.
Even if the question raised is one of the mixed question of fact
and law, this Court would not readily interfere with the conclusion
of the tribunal unless it is satisfied that said conclusion is
manifestly or obviously erroneous. [Paras 20, 21][81-H; 82-A-B]
Lloyds Bank Ltd. New Delhi v. Panna Lal Gupta AIR
1967 SC 428 – referred to.
1.5 Having perused the record, there is no inclination to
interfere in the finding recorded by the High Court though of
reversal. The High Court held that the total strength of workers
employed at the relevant time in respondent No.1’s Unit was 99
and that the status of 16 disputed employees could not be
conclusively proved to be that of a “workman” for the reasons
stated. First, the High Court assigned the reasons as to why the
finding of the Industrial Court holding the strength of workers as
115 is not factually and legally sustainable. Second, the reasons
assigned are neither arbitrary nor against the record and nor
perverse to that event so as to call for any interference by this
Court. Third, in these circumstances, this Court would be slow
to appreciate
the entire evidence afresh on this question and
lastly, such being a question of fact or a mixed question of law
and fact, it is binding on this Court.[Paras 23, 24][82-D-F]
1.6 Having gone through the evidence, it is found that the
High Court did not commit any jurisdictional error in reaching to
its conclusion. The Industrial Court held that there was no dispute
regarding the status of 79 workers. The dispute of status of an
employee was confined only to 36 employees, namely, whether
their status was that of the “worker” or “supervisor”. The
Industrial Court, however, held that the status of all the 36
employees was that of “worker” and accordingly recorded a
finding that 79+36 = 115 employees were working as “worker”
in the Unit at the relevant time. [Para 25][82-G-H]
1.7 The High Court, however, while reversing the finding
of the Industrial Court came to a conclusion that out of 36
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employees, only 20 employees could be regarded as “worker”
and, therefore, the total strength of workers at all relevant time
was 79+20 = 99. The High Court rightly held that there was no
cogent evidence adduced by the appellant to prove the status of
remaining 16 employees as to whether they also could be
regarded as “worker” employed in the Unit and, therefore, it
was not possible to hold that the total strength of the workers at
the relevant time was more than 100, i.e., 115. While concurring
with the reasoning of the High Court, it is found that since the
Industrial Court did not elaborately discuss the issue regarding
the status of 16 employees while holding the strength of workers
at 115 except clubbing 36(20+16) with 79, the High Court was
right in going into the evidence to the extent permissible and
reversed the finding of Industrial Court. The Industrial Court
should have examined the status of each such disputed employee
independently for holding whether they could also be regarded
as “worker”. It was, however, not done so. The appellant, in order
to prove the status of 16 employees, did not adduce any cogent
evidence as against the evidence of the respondent No.1. It is,
therefore, not possible for this Court to hold that the finding of
the High Court is wholly arbitrary or illegal or against the
evidence. [Paras 26, 27 and 29][83-C-D, G]
1.8 It is the duty of the High Court while exercising the
supervisory jurisdiction to see that the
subordinate Court has
exercised its powers in accordance with law and did not commit
any illegality or perversity in reaching to its conclusion. While
recording a finding, if it is noticed by the High Court that the
subordinate Court has failed to take into consideration the
material evidence or recorded a finding without there being any
evidence, then the High Court would be entitled to interfere in
such finding in exercise of its supervisory jurisdiction under
Article 227 of the Constitution. Such is the case here. It is not
proper to disturb the findings recorded by the High Court which
are more plausible and reasonable rather than that of the Industrial
Court. [Paras 31-33][84-A-C]
1.9 Respondent No.1 had employed 99 workers in their
manufacturing Unit at the time of declaring the closure of the
Unit. Since the strength of workers was below 100, it was not
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necessary for respondent No.1 to ensure compliance of Chapter
VB. In such circumstances, the provisions of Section 25-K had
no application to respondent No.1. [Para 34][84-D-E]
1.10 Taking into consideration the background facts and
circumstances of the case, it is just and proper to award in lump
sum a compensation of Rs.2,50,000/- to each worker who did not
accept the compensation, after making proper verification. If any
worker is not available for any reason, the amount payable to
such worker be paid to his legal representatives or nearest
relatives, as the case may be. [Paras 38-39][85-B-C]
Case Law Reference
AIR 1967 SC 428
referred to
Para 21
CIVIL APPELLATE JURISDICTION: Civil Appeal No. 20 of
2018.
From the Judgment and Order dated 12.09.2014 of the High Court
of Judicature at Bombay in Writ Petition No.5241/2003.
B. H. Marlapalle, Sr. Adv., Aditya Gaggar, Ajit Wagh, O. P.
Gaggar, Apoorv Shukla, Advs. for the Appellant.
Sanjay R. Hegde, Sr. Adv., D. J. Bhanage, Vikas Mehta,
Ms.Anushree Menon, Anil Kumar Mishra-I,  Pranjal Kishore, Ankit
Dhawan, Advs. for the Respondents.
The Judgment of the Court was delivered by
ABHAY MANOHAR SAPRE, J. 1. Leave granted.
2. This appeal is filed by the appellant-Trade Union against the
final judgment and order dated 12.09.2014 passed by the High Court of
Judicature at Bombay in Writ Petition No.5241 of 2003 whereby the
High Court allowed the writ petition filed by respondent
No.1-Kran Rader
Pvt. Ltd. and set aside the award dated 08.04.2003 passed by the
Industrial Court, Pune in a Complaint (ULP) No.544 of 1990 and, in
consequence, dismissed the complaint filed by the appellant herein.
3. In order to appreciate the short issue involved in the appeal, it is
necessary to set out few relevant facts infra.
4. The appellant is the Trade Union registered under the Trade
Union Act, 1926 having several members working in Factories.
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Respondent No.1 owned a factory (manufacturing unit) at Pune.  This
Unit was originally owned by respondent Nos. 2 and 3 who, in turn, sold
it to respondent No.4 in 1991 and then it was owned by respondent
No.1. The Unit was engaged in the manufacture of several components
like Traction Gears for supply to Railways, forging for oil industries and
other manufacturing units etc.  The members of the appellant-Union
were working in respondent No.1’s factory at all relevant time.
5. In 1990, respondent No.1 suffered business loss in running the
said manufacturing unit and, therefore, decided to close down the said
unit permanently.  With that end in view, respondent No.1 served a notice
of closure to the State Government (Maharashtra) under Section 25
FFA of the Industrial Disputes Act, 1947 (in short, “ID Act”)  on
29.08.1990 with a copy to the appellant-Union expressing therein their
intention to close the operation of the Unit on expiry of 60 days with
effect from 29.10.1990.
6. The appellant-Union, felt aggrieved of the closure notice issued
by respondent No.1, filed complaint against respondent No.1 under Section
28 read with Items 9 and 10 of the Schedule IV of the Maharashtra
Recognition of Trade Unions and Prevention of Unfair Labour Practices
Act, 1971 (hereinafter referred to as “the Act”) in the Industrial Court
at Pune in October 1990 being Complaint(ULP) No.544/1990.
7. In substance, the grievance of the appellant in their complaint
was that since
respondent No.1 had employed more than 100 workers
on an average per working day for preceding 12 months in their
manufacturing unit, the provisions of Chapter VB (Section 25-K) of the
ID Act and, in turn, all the relevant provisions contained therein were
applicable to respondent No.1.  It was alleged that due to this reason, it
was obligatory upon respondent No.1 to have ensured compliance of all
the relevant provisions applicable for closure of the Unit. It was alleged
that since admittedly the relevant provisions applicable to closure were
not complied with by respondent No.1, a case was made out under the
ID Act read with the Act to seek a declaration that the intended closure
declared by respondent No.1, vide their notice dated 29.08.1990, is illegal
under the ID Act read with the Act with a further grant of all consequential
reliefs to each worker arising out of grant of such declaration sought by
the appellant in the Complaint in their favour.
NATIONAL KAMGAR UNION v. KRAN RADER PVT. LTD.
[ABHAY MANOHAR SAPRE, J.]
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8. Respondent No.1 (employer) filed a reply and denied therein
the allegations made by the appellant-Union in their complaint.  According
to Respondent No.1 they never employed more than 100 workers in
their Unit so as to attract the rigor of Chapter VB and other related
provisions of the ID Act to give effect to the closure.  In other words,
according to respondent No.1, the strength of workers working in their
Unit was always less than 100 in number, therefore, the provisions of
Chapter VB and the related provisions of the I.D. Act had no application
to respondent No.1.  It was, therefore, contended that the decision taken
by respondent No.1 to close the Unit with effect from 29.10.1990 was
legal, proper and in accordance with law and hence could not be faulted
with.
9. The parties adduced evidence (documentary/oral) in support
of their respective contentions. The Industrial Court, by its award dated
08.04.2003, allowed the appellant’s complaint. It was held that respondent
No.1 had employed 115 workers at all relevant time in their Unit, therefore,
the provisions of Chapter VB of the ID Act were required to be followed
while effecting the closure of the Unit.  It was held that since the relevant
provisions were not complied with by respondent No.1, the closure in
question was bad in law entitling the members of the appellant-Union to
claim all consequential benefits arising therefrom as if there was no
closure of
the Unit.
10. Respondent No.1 felt aggrieved and filed a writ petition before
the Bombay High Court. By impugned judgment, the Single Judge allowed
the writ petition and while setting aside of the award of the Industrial
Court dismissed the appellant’s complaint. The High Court held that the
total strength of the workers working at all relevant time in respondent
No.1’s Unit was 99 and not 115 as held by the Industrial Court.  It was
held that due to this reason, it was not necessary for respondent No.1 to
ensure compliance of the provisions of Chapter VB of the ID Act while
declaring the closure of their Unit.
11. The appellant-Union felt aggrieved and filed the present appeal
by way of special leave in this Court.
12. Heard Mr. B.H. Marlapalle, learned senior counsel for appellant
and Mr. D.J. Bhanage and Mr. Sanjay R. Hegde, learned senior counsel
for respondents.
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13. Having heard the learned counsel for the parties at length and
on perusal of the record of the case, we find no good ground to interfere
in the impugned judgment of the High Court.  In other words, the reasoning
assigned by the High Court appears to be just and reasonable calling no
interference for the reasons mentioned hereinbelow.
14.  The main question, which arises for consideration in this appeal,
is only one, viz., how many workers were working in the Unit of
respondent No.1 at all relevant time,  whether the strength of the workers
was above 100 or below 100.  In other words, the question, which arises
for consideration, is whether the provisions of Section 25-K of Chapter
VB of the ID Act were applicable to respondent No. 1-Unit at the
relevant time.
15. If the strength of the workers was above 100 at the relevant
time, in that event, the provisions of Section 25-K were applicable to
respondent No.1 whereas if the strength was below 100, in such event,
the provisions of Section 25K had no application.  In the case of former,
the appellant-Union succeeds and in the case of later, respondent No.1
succeeds.
16. As mentioned above, the Industrial Court held that 115 workers
were found working at the relevant time whereas the High Court held
that 99 workers were found working in the Unit of respondent No.1 at
the relevant time.
17. There can be no dispute to the proposition that the question as
to what is the total strength of the workers employed
in the Unit or, in
other words, how many workers were working in a particular unit is
essentially a question of fact.  Such question is required to be decided by
the Courts on appreciation of evidence adduced by the parties.
18. Once the Courts record a finding on such question, be that of
concurrence or reversal, the finding is usually held binding on this Court
while hearing the appeal under Article 136 of the Constitution.
19. It is only when such finding is found to be against any provision
of law or evidence or is found to be wholly perverse to the extent that no
average judicial person could ever record such finding, it would not be
held binding on the superior Court.
20. When the question arises as to what is the status of a
“workman”, this Court has held that it has to be inferred as a matter of
law from facts found and if the question involved is one of drawing a
NATIONAL KAMGAR UNION v. KRAN RADER PVT. LTD.
[ABHAY MANOHAR SAPRE, J.]
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legal inference as to the status of a party from facts found, it is not a
pure question of fact.  It is held that if the inference drawn by the Tribunal
in regard to the status of the workman involved the application of certain
legal tests, it necessarily becomes a mixed question of fact and law.
21. This Court has, however, cautioned that it must be remembered
that even if the question raised is one of the mixed question of fact and
law, this Court would not readily interfere with the conclusion of the
Tribunal unless it is satisfied that said conclusion is manifestly or obviously
erroneous. (See AIR 1967 SC 428)
22. With a view to examine the question from both angels which
is taken note of above, we perused the evidence and also called upon
the parties to file additional evidence before this Court and it was filed.
23. Having perused the record, we are not inclined to interfere in
the finding recorded by the High Court though of reversal.  In other
words, we are inclined to agree with the reasoning of the High Court
and accordingly hold that the total strength of workers employed at the
relevant time in respondent No.1’s Unit was 99 and that the status of 16
disputed employees could not be conclusively proved to be that of a
“workman” for the reasons stated infra.
24.  First, the High Court assigned the reasons as to why the
finding of the Industrial Court holding the strength of workers as 115 is
not factually and
legally sustainable.  Second, the reasons assigned are
neither arbitrary nor against the record and nor perverse to that event so
as to call for any interference by this Court. Third, in these circumstances,
this Court would be slow to appreciate the entire evidence afresh on this
question in this appeal and lastly, such being a question of fact or a
mixed question of law and fact, it is binding on this Court.
25. Inspite of this, we have gone through the evidence with a
view to find out as to whether the High Court has committed any
jurisdictional error in reaching to its conclusion.  In our view it is not.
We notice that the Industrial Court held that there was no dispute regarding
the status of 79 workers. The dispute of status of an employee was
confined only to 36 employees, namely, whether their status was that of
the “worker” or “supervisor”. The Industrial Court, however, held that
the status of all the 36 employees was that of “worker” and accordingly
recorded a finding that 79+36 = 115 employees were working as “worker”
in the Unit at the relevant time.
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26. The High Court, however, while reversing the aforementioned
finding of the Industrial Court came to a conclusion that out of 36
employees, only 20 employees could be regarded as “worker” and,
therefore, the total strength of workers at all relevant time was 79+20 =
99.  In our opinion, the High Court rightly held that there was no cogent
evidence adduced by the appellant to prove the status of remaining 16
employees as to whether they also could be regarded as “worker”
employed in the Unit and, therefore, it was not possible to hold that the
total strength of the workers at the relevant time was more than 100,
i.e., 115.
27.  We, while concurring with the reasoning of the High Court,
also find that since the Industrial Court did not elaborately discuss the
issue regarding the status of 16 employees while holding the strength of
workers at 115 except clubbing 36(20+16) with 79, the High Court was
right in going into the evidence to the extent permissible and reversed
the finding of Industrial Court. In our view, the Industrial Court should
have examined the status of each such disputed employee independently
for holding whether they could also be regarded as “worker”.  It was,
however, not done so.
28. Mr. B.H. Marlapalle, learned senior counsel for the appellant-
Union, strenuously argued with the help of the entire evidence and the
relevant provisions of the Factories Act, 1948 and the Payment of Wages
Act including the statutory forms prescribed in
the two Acts for filing
the details of workers working in the Unit that the finding of the Industrial
Court appears to be more plausible and reasonable as compared to the
finding recorded by the High Court on this question and hence the finding
of the Industrial Court deserves to be restored.
29. We cannot accept this submission of learned counsel for the
appellant in the light of what we have held above. In our view, the
appellant, in order to prove the status of 16 employees, did not adduce
any cogent evidence as against the evidence of the respondent No.1.  It
is, therefore, not possible for this Court to hold that the finding of the
High Court is wholly arbitrary or illegal or against the evidence.  We do
not wish to go into this factual question any more.
30. Learned counsel for the appellant then urged that the High
Court has committed a jurisdictional error when it went on to re-appreciate
the evidence and then reversed the finding of the Industrial Court under
NATIONAL KAMGAR UNION v. KRAN RADER PVT. LTD.
[ABHAY MANOHAR SAPRE, J.]
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Article 227 of the Constitution.  In our view, it does not appear to be so.
31. It is the duty of the High Court while exercising the supervisory
jurisdiction to see that the subordinate Court has exercised its powers in
accordance with law and did not commit any illegality or perversity in
reaching to its conclusion.
32. While recording a finding, if it is noticed by the High Court
that the subordinate Court has failed to take into consideration the material
evidence or recorded a finding without there being any evidence, then
the High Court would be entitled to interfere in such finding in exercise
of its supervisory jurisdiction under Article 227 of the Constitution. Such
is the case here.
33. In the light of foregoing discussion, we do not consider proper
to disturb the findings recorded by the High Court which are more
plausible and reasonable rather than that of the Industrial Court.
34. In view of the foregoing discussion, we also hold that respondent
No.1 had employed 99 workers in their manufacturing Unit at the time
of declaring the closure of the Unit in 1990.  Since the strength of workers
was below 100, it was not necessary for respondent No.1 to ensure
compliance of Chapter VB.  In other words, in such circumstances, the
provisions of Section 25-K had no application to respondent No.1.
35. This takes us to examine the next question as to how much
compensation and under which heads the workers are entitled
to receive
from respondent No.1 (Company).
36. Learned counsel for respondent No.1, however, stated that
out of total workers, most of the workers have settled their claims by
accepting the compensation offered by respondent No.1 voluntarily.
Learned counsel stated that the compensation paid to each worker
consisted of (i) amount of Gratuity payable under the Payment of Gratuity
Act, (ii) closure compensation payable under the I.D. Act, and over and
above these two statutory payments of compensation, the respondent
No.1 also paid 30 days’ wages for each completed year of service as ex
gratia payment to each worker.  It was also stated that now hardly 16
workers or so remain unpaid because they did not accept the
compensation when offered to them and preferred to prosecute the
present litigation.
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37. Learned counsel for respondent No.1 stated that the total
compensation paid to every worker in 1990-1991 varies between Rs.1
lakh to Rs.2 lakhs.
38. Taking into consideration the aforementioned background facts
and circumstances of the case, we consider it just and proper to award
in lump sum a compensation of Rs.2,50,000/- (Rs.Two Lakhs and Fifty
Thousand) to each worker who did not accept the compensation.
39. Let Rs.2,50,000/- (Rs.Two Lakhs and Fifty Thousand) be paid
to each such worker after making proper verification.  If any worker is
not available for any reason, the amount payable to such worker be paid
to his legal representatives or nearest relatives, as the case may be,
after making proper verification.
40. Respondent No.1 will, accordingly, deposit the entire
compensation payable to all such workers with details in the Industrial
Court, Pune.  A notice will then be served to each worker or his legal
representatives, as the case may be, by the Industrial Court to enable
the workers to withdraw the amount from the Industrial Court.
41. The amount will be paid to every worker or his nominee as
the case may be by the demand draft issued in his/her name or in the
name of legal representatives, as the case may be.  It will be duly
deposited in his/her Bank account to enable him/her to withdraw the
same.
42.  The appellant would submit necessary details of each such
worker before the Industrial Court. The Industrial Court would ensure
compliance
of the directions of this Court and complete all formalities
within three months from the date of this order.
43. We make it clear that this order is applicable only to those
workers who did not accept the compensation from respondent No.1.
44. In other words, those workers who already accepted the
compensation will not be entitled to get any benefit of this order.
45. With these directions, the appeal stands disposed of finally.
Nidhi Jain
           Appeal disposed of.
NATIONAL KAMGAR UNION v. KRAN RADER PVT. LTD.
[ABHAY MANOHAR SAPRE, J.]