Case: M/S. Laxmi Rattan Cotton Mills Ltd Vs. State Of U.P.

3. Appellant used to run a cotton mill. It was taken over in 1976 by National Textile Corporation which was established by the Central Government for augmenting the textile sector and to ensure and facilitate the production and distribution of cloth at affordable price.4. Respondent Nos. 2, 7, 5, 3, 4 and 6 were engaged as trainee investigators on the basis of the applications submitted to the General Manager of the Mills on 29.07.1980, 10.03.1981, 21.11.1980, 02.01.1981, 10.01.1981 and 30.03.1981, respectively. Appointments were made on monthly stipends. One of the terms and conditions in the letter of engagement as a trainee investigator reads,That the management shall have no obligation whatsoever to provide you any job in these Mills after completion of the said period of training.Although no assurance was given to them that on completion of the training they would be appointed as trainee investigator, they were appointed as clerks. Allegedly, at that point of time, only the posts of clerks were vacant.Some of the terms of their appointments read asThat you shall be paid a basic salary of Rs. 120/- per month in the scale of Rs. 120-8-160-10- 200-EB-13-265-16-345-EB-20-445-24-517. In addition you will be paid other allowances as applicable to other temporary clerks of the Mills.2. That your appointment is for a period of six months on account of temporary exigency of work and after completion of which your service will stand automatically terminated. However, we reserve the right to terminate your service ever earlier at any time without assigning any reason and without any notice or payment in lieu thereof.3. That you will have to work against absenteeism/ leave etc. amongst clerks in any of the departments/ sections in the General Office as well as in the Mills.4. That your other terms and conditions of service will be governed by standing order applicable for clerks in this Mill.5. *** ***If the above offer is acceptable to you, please sign copy of this letter in token of your acceptance and report for joiningwere offered the scale of pay applicable to a clerk. They accepted the said post without any protest or demur. They were at a later date made permanent clerks also. Yet again, they accepted the said status without any demur whatsoever.The Company, however, became sick in October, 1991. A reference was made to the Board for Industrial and Financial Reconstruction (BIFR) whereupon a proceeding was initiated. Eventually, the Mill was closed, upon obtaining an approval from the Central Government in terms of Section 25O of the Industrial Disputes Act, 1947. Only after closure of the said Mills sometime in October, 1991, the concerned respondents raised a demand through a Union known as Kapda Mills Karamchari Sangh on 1.02.1992 seeking for the post of investigators and that too from the date of their initial appointment with arrears and difference in pay.Pursuant to and in furtherance of the said demand, the State of Uttar Pradesh, in exercise of its power conferred upon it under Section 4(k) of the U.P. Industrial Disputes Act, 1947 made a reference for adjudication thereof before the Tribunal by a notification dated 2.04.1993, which reads asgiving the designation of clerk and pay scale to its 6 workmen mentioned in enclosed Schedule, after imparting training of Investigator to them, is appropriate and legal? If not then what kind of relief, the concerned employees are entitled to get? From which date with any otherBefore the Tribunal, the respondents sought for a direction for appointment in the post of investigators from the date of their initial appointment.7. Appellant in its written statement inter alia denied or disputed that the Union at any point of time had made any demand or representation in regard to the change of the status of the said employees. It was contended that the Management was not bound to provide any employment to the respondents, upon completion of the terms of their training. The fact that the production of the Mill was lying closed was also brought to the notice of the Tribunal. Furthermore, it was urged that any fresh financial burden would have adverse effect on the industry as any wage revision had been barred.8. The Industrial Court, however, by reason of an award dated 3.11.1988is beyond comprehension as to how the workmen concerned even after completion of a successful training period would prefer to be appointed for a lower post carrying less wages... For the sake of argument if it is assumed that no posts of investigators were available at the time of completion of their training then in the event of vacancy, the plaintiffs would have been given preference for appointment to the post of5. Therefore, I order that the plaintiffs be treated as senior on the post of investigator to Sh. Sunil Kumar Chaurasiya in the pay scale of Rs. 330-560 from the date of absorption and in the scale of Rs. 1400-2300 w.e.f. 31.12.95 and thereafter in the pay scale of Rs. 4500-7000/-. The plaintiffs are to be fixed in the pay scale of Rs. 330-560 w.e.f. 9.3.82 and subsequent fixation of pay from different dates in the revised scales of pay and they will be paid the difference of pay as arrears but due to delayed raising of the matter/ litigation the plaintiffs will be eligible to draw difference of pay from the date of reference of matter to the Court. They shall also be entitled of Central D.A. for the post of investigator.A writ petition preferred thereagainst has been dismissed by the High Court by reason of the impugned judgment. During pendency of the writ application, however, subsequent events took place, which have been brought to the notice of this Court, by reason of a supplementary affidavit filed on 25.04.2005, that the respondents, in the meanwhile pursuant to a scheme floated for voluntary retirement scheme known as the Modified Voluntary Retirement Scheme, applied therefore and obtained compensation in the following terms:Sl. No.Name of the respondentsDate of resignationNet amount paid (Rs.)Date of receipt1.SandipKumar Bajpai(Res. No. 2)12.7.20022,95,090/-10.10.20032.SurenderaBallab Goswami (Res. No. 3)12.7.20023,26,779/-29.5.20053.K.S. Usmani(Res. No. 4)12.7.20022,80,636/-15.3.20044.RamendraPrasad Sharma (Res. No. 5)12.7.20022,98,670/-10.10.20035.Shankar Pathak(Res. No. 6)12.7.20022,90,240/-31-10-20036.Ram Kewal Kanojia(Res. No. 7)12.7.20022,95,090/-10.10.200310. By reason of the impugned judgment, however, the writ petition was dismissed opining that the award of the Industrial Tribunal was neither perverse nor suffered from any error apparent on the face of the record.

Court's reasoning:
The Industrial Court, unfortunately, did not deliberate upon any of the aforementioned issues which arose for its consideration. The High Court again failed to address itself the aforementioned principal issues. It merely endorsed the views of the Industrial Court without applying its mindmay also notice the subsequent events. A voluntary retirement scheme was floated. Respondents even while opting therefore stated their designations to be clerks. That may not be decisive but then it is at least a pointer to show that they had all along accepted the saidIndustrial Court as also the High Court furthermore failed and/ or neglected to consider the fact that the time when the industrial dispute was raised, the Mill had already beencannot be any doubt whatsoever that the Industrial Court in terms of Section 11A of the Industrial Disputes Act, 1947 exercises a wide discretion. But, such discretion must be exercised judiciously. All attempts must be made to strike a balance. Even otherwise grant of back wages and that too with retrospective effect may not be appropriate in allimpugned judgment cannot be sustained which is set aside accordingly. However, if any sum has been paid to the workmen pursuant to the impugned award of the Tribunal and the judgment of the High Court, the same shall not be recovered