Mrs. Jane Malik vs Deputy Labour Commissioner and Others

Rajiv Sahai Endlaw, J.—The petitioner carrying on business of finishing, packing and export of various fancy items at Poultry Farm No. 4, Papravat Road, Najafgarh, New Delhi in the name and style of M/s. Rulemak Overseas, instituted this petition for quashing and setting aside of the order dated 30th December, 1998 of the Deputy Labour Commissioner, Government of NCT of Delhi for recovery of Rs. 2,19,483/- due from the petitioner u/s 25N(7) of the ID Act.

The aforesaid order was made on a complaint of more than 100 persons represented through the All India Engineering and General Mazdoor Union which has been impleaded as respondent No. 3 inter alia to the effect that they were all employed with the petitioner and had been removed from work w.e.f. 1st September, 1998. The petitioner was called upon to show cause as to why actions should not be taken against her for violation of Section 25N of the Act. The petitioner by her reply contended that she had never employed more than 20 workers and hence Section 25N(7) does not apply to her. However, the Deputy Labour Commissioner, on the basis of the report of the Labour Inspector, found more than 100 workers working for the petitioner; it was also found that the petitioner was paying less than the prescribed minimum wages. The Labour Commissioner thus concluded that the petitioner had falsely contended that she was employing less than 20 persons and the petitioner having failed to take back the said workers, the order aforesaid impugned in this petition came to be made.

This Court vide ex parte order dated 29th January, 1999 while issuing notice of the petition stayed the operation of the order aforesaid dated 30th December, 1998. However, subsequently after hearing the counsel for the respondent No. 3 Union, on 25th May, 1999 the petitioner was directed to deposit the amount in the court and which the respondent No. 3 Union was permitted to withdraw subject to further orders. The petitioner preferred an appeal being LPA 246/1999. Vide order dated 21st June, 1999 in the said appeal, the petitioner, instead of being required to deposit the entire amount of Rs. 2,19,483/- was directed to deposit Rs. 1 lac in this Court as a condition for stay of recovery pursuant to the aforesaid order. The said amount of Rs. 1 lac was deposited in this Court. The petitioner however withdrew the appeal with liberty to approach the Single Judge for appropriate orders. This Court ultimately vide order dated 13th September, 2002, as a condition of stay, allowed the sum of Rs. 1 lac deposited as aforesaid by the petitioner to be withdrawn by the respondent No. 3 subject to filing an undertaking in this Court to refund the amount in the event of the writ petition succeeding. The amount has been so withdrawn by the respondent No. 3. Rule was issued in the petition on 25th July, 2006. The parties were referred to Lok Adalat but the matter could not be settled. The respondent No. 3 stopped appearing before the Lok Adalat and did not appear when the matter was listed thereafter in the court on 6th May, 2009, 20th October, 2009 and 3rd February, 2010. On 3rd February, 2010 notice of default was ordered to be issued to the counsel for the respondent No. 3. The notice has been received back with the endorsement that there is no such advocate at the address. In the circumstances, need is not felt to await contesting respondent No. 3 any further and the contesting respondent No. 3 is proceeded against ex parte. The counsel for the petitioner has been heard.

The main contention of the counsel for the petitioner is that the Labour Commissioner could not have directed recovery of any amount from the petitioner without any determination. A perusal of the impugned order dated 30th December, 1998 shows that there is no basis therein as to how the sum of Rs. 2,19,483/- sought to be recovered from the petitioner has been computed. The pleading of the petitioner, as aforesaid, is that she has been employing less than 20 persons only; that one Mr. Shaukat Ali was working for her as Supervisor and used to disburse the wages to the other employees; that the said Mr. Shaukat Ali started blackmailing the petitioner and threatened her with having her implicated in labour disputes; that the petitioner did not succumb to the said Mr. Shaukat Ali and it is the said Mr. Shaukat Ali who has set up/instigated the respondent No. 3 union to lodge complaints against the petitioners with the Labour Department.

The Deputy Labour Commissioner, before issuing the impugned order of recovery aforesaid undoubtedly gave notices to the petitioner and in response to which the petitioner controverted that she was employing over 100 employees. Section 25N is contained in Chapter V-B of the ID Act which applies only to those industrial establishments in which not less than 100 workers are employed on an average per working day. Section 25N prohibits such industrial establishment from retrenching the workman inter alia without prior permission of the appropriate Government. Sub-section (7) provides the consequences for retrenchment without special permission; it lays down that the workman shall be entitled to all the benefits in law for the time being in force.

The Division Bench of this Court in M/s. Colcom Plastic Ltd. and others Vs. Union of India and others, and in Weston Electroniks Ltd Vs. Union of India and Others, in relation to Section 33C(1) has held that in case the employer raises bona fide dispute on the right of a workman to claim of money, the appropriate Government has no right of adjudication of such dispute and the workman will have to raise then an industrial dispute for adjudication of the claims. The said dicta of the Division Bench would apply with equal force to Section 25N(7) also. The appropriate Government /Deputy Labour Commissioner does not have any adjudicatory powers.

In the present case the petitioner in response to the show cause notices issued by the Deputy Labour Commissioner controverted the claim of the respondent No. 3 Union. Even though the petitioner failed to appear before the Deputy Labour Commissioner but in the face of her denial of the claims, the same could not have been adjudicated or deemed to be correct. The Deputy Labour Commissioner ought to have directed the workman in such case to raise a dispute. The counsel for the petitioner in this regard relies on Municipal Corporation of Delhi Vs. Ganesh Razak and Another, , Central Inland Water Transport Corporation Limited Vs. The Workmen and Another, laying down that there can be no adjudication u/s 33C(2). It is contended that the same principle would apply to Section 25N(7) also.

I therefore find that the respondent No. 1 Deputy Labour Commissioner was not entitled to issue the recovery certificate as done vide order impugned dated 30th December, 1998 without any adjudication of the claims of the respondent No. 3 and/or its members. Section 25N(7) is only an enabling provision and/or a provision for rights. However, the said rights have to be worked out/enforced by resorting to the provisions of the Act. Section 25N(7) does not empower the Deputy Labour Commissioner to, on violation of Section 25N being alleged and the same being denied by the employer, issue a certificate for recovery.

The petition therefore succeeds. The order dated 30th December, 1998 of the Deputy Labour Commissioner is set aside and/or quashed. However, since the respondent No. 3 workmen did not finally contest the petition, no order as to costs.