Rustom Spinners Limited vs Amratji Shivaji Thakore

Mr. K.M. Thaker, J.—In present petition, the petitioner company has placed under challenge award dated 30.1.2006 passed by learned Labour Court, Kalol in Reference (LCK) No.272 of 1993 whereby the learned Labour Court has, having regard to the fact that the industrial establishment of the petitioner company is closed since February 1999, instead of directing the company to reinstate the claimant, directed that the claimant should be paid full salary for the period from the date of termination till the date of closure of the undertaking i.e. 10.2.1999. Feeling aggrieved by the said award and direction, the company has taken out present petition.

Before proceeding further, it is necessary to mention that while admitting the petition vide order dated 3.2.2009, this Court directed the petitioner company to deposit the amount. The said order reads thus:

"After hearing Mr. Dave, learned advocate for the petitioner, and Mr. Bhatt, learned advocate for the respondent, it comes out that the award requires further consideration. Hence, Rule. The unit is closed hence, it is necessary to protect the interest of the workman. It is also appropriate to balance the equity and since the petition is being admitted, the direction regarding payment of wages for the period from November, 1992 to February, 1999 is stayed on condition that the petitioner shall deposit the decreetal amount in this Court within a period of 4 weeks from today. The amount so deposited shall be invested in Fixed Deposit in any Nationalized Bank and the accrued interest shall be reinvested and not paid to the petitioner."

Mr.Dave, learned advocate for the petitioner and Mr.Bhatt, learned advocate for the respondent jointly submitted that in pursuance of and in compliance of the order dated 3.2.2009 the petitioner company has deposited Rs.52,650/- and that upon such deposit the interim order dated 3.2.2009 is complied.

So far as factual background is concerned, it has emerged from the record and from rival submissions by learned advocates for the petitioner company and the respondent claimant that with the allegation that the company illegally terminated his service on 20.11.1992, the claimant raised industrial dispute. The appropriate government referred the dispute for adjudication to learned Labour Court at Kalol. The dispute culminated into Reference (LCK) No.272 of 1993.

In his statement of claim, the claimant alleged that since last about 24 months, he was in service with the opponent company as Fireman and he was paid salary @ Rs.27 per day. He alleged that his service was terminated by oral order on 20.11.1992 in breach of statutory provision and in violation of principles of natural justice. With such allegations, the claimant demanded that he should be reinstated in service with all consequential benefits.

The opponent company (i.e. present petitioner) opposed the reference and demand of the claimant. In its written statement, the company contended that the claimant was engaged on purely temporary basis and that he joined the company for temporary period and that the claimant was engaged on daily wage basis for temporary period. The company further contended that the claimant joined the company in April 1992 and that he was very irregular in attendance. The company further contended that in view of his irregularity, the claimant was visited with notices and intimations asking him to report for duty and to be regular. The company also contended that the claimant voluntarily stopped reporting for duty and that since he continuously did not report for duty for many days, the company had forwarded notices dated 1.12.1992, 28.12.1992 and 22.1.1993, however, despite such intimations, the claimant did not report for work. The company contended that even according to allegation by the claimant, his service came to be discontinued on and from 20.11.1992 and that, therefore, total tenure of his service with the company would be from April 1992 to 20.11.1992 and that during his entire tenure, the claimant never worked with the company for more than 10 to 15 days in any month and consequently, the claimant had not worked for 240 days with the company and that therefore, the allegations by the claimant that the company had committed breach of statutory provision are incorrect and unjustified. The company contended that the claimant worked with the company only for about 7 months and not two years as alleged by him. The company also contended that the since the claimant had not worked for 12 months and/or for 240 days, question of complying with Section 25F or other statutory provision did not arise. The company also contended that the claimant was very irregular in attending his duty and actually, it is the claimant who voluntarily stopped reporting for duty and the company had not terminated his service and that therefore, even otherwise, question of complying any statutory provision for conducting domestic inquiry would not arise. With such submissions, the company opposed the reference and the demand of the claimant.

When the parties completed their pleadings, the learned Labour Court received evidence from both sides and upon completion of stage of evidence, the learned Labour Court heard submission by learned advocates for the claimant and the opponent company.

7.1 On the basis of material available on record, the learned Labour Court reached to the finding of fact and conclusion that the industrial establishment of the company where the claimant was employed has been closed down since February 1999.

7.2 The learned Labour Court also reached to the conclusion that the company failed to prove its case that it was the claimant who had stopped reporting for work and the learned Labour Court also held that since before discontinuing the service of the claimant neither domestic inquiry was conducted nor compensation was paid nor salary in lieu of notice was paid, the termination of claimant''s service was illegal. Having reached such findings and conclusion, the learned Labour Court passed impugned award with above mentioned directions.

Mr. Dave, learned advocate for the petitioner company assailed the award and submitted that the learned Labour Court failed to appreciate that the claimant did not work with the petitioner company for one and half years and that the claimant also failed to establish that during his tenure, the claimant had worked for 240 days. He submitted that actually, the claimant had worked with the company from April 1992 and he had voluntarily stopped reporting for work. He also contended that even according to his own case, the claimant''s service was discontinued on and from 20.11.1992 and that, therefore, according to his own case, total length of claimant''s service would be of about 7 months, i.e. from April 1992 to November 1992 and that during the said period, the claimant had not worked for 240 days. He submitted that the company had not passed any order terminating service of the claimant. He submitted that the learned Labour Court has, after examining evidence available on record, appreciated the fact that the petitioner establishment is closed down since February 1999. He submitted that in view of such facts the learned Labour Court ought not have directed payment of full back wages for the entire period i.e. from the alleged date of termination to the date of closure of the petitioner unit. According to learned advocate for the petitioner, the said direction is unjustified.

Mr.Bhatt, learned advocate for the respondent opposed the submissions. He submitted that the learned Labour Court has not committed any error in final award and final direction passed by the learned Labour Court. He submitted that the learned Labour Court has, upon examination of evidence, found that the company failed to establish its case that the workman had voluntarily abandoned the service. Mr. Bhatt, learned advocate for the respondent submitted that the claimant''s service was terminated in violation of principles of natural justice and in breach of statutory provision and that therefore, the findings recorded by the learned Labour Court cannot be said to be unjustified or arbitrary.

I have heard Mr. Dave, learned advocate for the petitioner, and Mr. Bhatt, learned advocate for the respondent claimant. I have also examined the impugned award and other material available on record.

10.1 In view of the fact that the petitioner company itself contended before the learned Labour Court that even if the date alleged by the claimant is the date on which his service is terminated is believed, then also, it would emerge that the claimant had worked with the petitioner company for 7 months, it goes to show and the said submission would also establish that the petitioner company did not controvert the fact that the service of the claimant came to end on and from 20.11.1992.

10.2 Of course, the ground or reason for which the service of the claimant came to be discontinued is in dispute, i.e. whether on oral instruction by the company the service of the claimant was discontinued or the claimant had voluntarily abandoned the service. The fact remains that the service of the claimant came to end on and from 20.11.1992.

10.3 Likewise, it is also not in dispute that the industrial establishment of the company is closed down since February 1999. Against the said finding of fact by the learned Labour Court, the claimant has not raised any dispute and the claimant has accepted the said finding of fact. Consequently, the said finding of fact has attained finality.

It is pertinent to note that the claimant did not place any material on record before learned Labour Court to establish his claim with regard to length of his service. The claimant did not clarify the date on which he was appointed. He also did not place on record any document which would demonstrate the date of his appointment or to support his claim that he worked for 2 years with the company. On the other hand the company had specifically denied the allegation and claim of the workman that he had worked for about 2 years before his service came to be terminated.

In this view of the matter, learned Labour Court could not have mechanically accepted workman''s claim and allegation that he had worked for 2 years. In absence of any evidence the learned Court could not have made any presumption about total tenure/length of service of the claimant.

12.1 Unfortunately, learned Labour Court has failed to consider this aspect and learned Labour Court has unjustifiably proceeded on the premise of assumption with regard to length of service of the claimant.

12.2 Another vital aspect is with regard to the findings recorded by the learned Labour Court to the effect that the company terminated service of the claimant without conducting any enquiry.

12.3 It is necessary to note that the company in its written statement, contended that it had not terminated service of the claimant for any misconduct. Of course the company mentioned in its written statement that the claimant had voluntarily stopped for work. But the said statement in the written statement could not have been construed to mean that the company had terminated service of the claimant by treating his absence from duty as misconduct. The learned Court could have, probably, considered that the said termination tant amounts to retrenchment, but it could not have been faulted.

Under the circumstances, the premise on which the learned Labour Court proceeded viz. that the company terminated service of the claimant without conducting enquiry and therefore termination is erroneous, is, actually, not sustainable.

13.1 The learned Labour Court has disbelieved the case of the company that the claimant had voluntarily stopped reporting for duty. The company has failed to place any material on record to convince this Court that the said finding of fact is unjustified or unsustainable.

13.2 In light of the facts and circumstances of the case even if the conclusion by the learned Labour Court that the company terminated service of the claimant and that the termination of the claimant''s service is illegal, is held to be just and sustainable, then also the direction by the learned Labour Court to pay full back wages is not justified in light of the peculiar facts and circumstances of the case.

13.3 On this count, it is pertinent that even if the workman''s claim and allegation about total length of his service is to be believed then also the total tenure of claimant''s service would be hardly 2 years.

13.4 In this background, more particularly when the learned Labour Court has accepted that the establishment of the company is closed down, the direction to pay full back wages is not justified.

13.5 Having regard to the fact that according to the case of the company the claimant had worked only for 7 months and also considering other side of the case i.e. claim of the workman that he worked for 2 years, and also having regard to the fact that the learned Labour Court has not recorded any finding of fact that the claimant had worked for 240 days in preceding 12 months, this Court is of the view that if impugned order is partly set aside and modified and the direction to pay full back wages is modified and the company is directed to pay Rs.26,000/- as lump sum compensation (which would be equivalent to 50% back wages) then equity would be balanced and the said order would be in fitness of things.

Under the circumstances impugned award is partly set aside and modified. The direction to pay 100% back wages is modified and the company is directed to pay Rs.26,000/- as lump sum compensation.

From the joint submissions by learned advocates for the petitioner and respondent it has emerged that the petitioner company has, in compliance of the interim order dated 3.2.2009 already deposited Rs.52,650/- in the registry. Therefore it is clarified that the claimant will be entitled to receive Rs.26,000/- along with accrued interest, if any, in respect of said Rs.26,000/- for the period from date of deposit until 26.12.2016. Such amount shall be paid/disbursed to claimant by A/c payee cheque after he submits proof of identity. The disbursing authority shall verify the proof of identity and upon being satisfied, the said amount of Rs.26,000/- along with interested as aforesaid shall be paid to the claimant by A/c payee cheque and balance amount with interest accrued thereon shall be repaid/refunded to the petitioner company.

Accordingly, the petition is partly allowed. Rule is made absolute to the aforesaid extent.