SIDCUL vs Arshad Jamal And Others

Sharad Kumar Sharma, J

A very interesting and peculiar situation which has arisen in the present case for consideration before this Court it is as to what would be the effect of a notified closure of a sick industry and as to what would be the scope of entitlement for the wages to the workman/respondent for a period after the declaration of notified closure of the sick Unit as such. In order to answer the aforesaid question, certain facts are required to be dealt with prior to considering the rival contentions of the parties to the writ petition, and its legal implications.

It is an admitted case that, in the erstwhile State of Uttar Pradesh, there was a statutory Corporation created under the Company Act, called as "U.P. State Textile Corporation Limited", under which the private respondent herein was an employee/workman and was then working as an electrician. During the tenure of his employment, when he was serving in the Unit, the Unit was declared to be sick after the invocation of the proceedings under Section 15 of the Sick Industrial Companies (Special Provisions) Act, 1985 (in short to be referred as "SICA"), and as a consequence thereto, on its formal declaration of a sick industry, the matter was referred to the Board of Industrial and Financial Reconstruction (in short to be "BIFR"), New Delhi.

Ultimately, after resorting to the proceedings under Section 15 of the SICA, the BIFR, had made a formal declaration of the U.P. State Textile Corporation Limited, as to be a sick Company under Section 3 (1)(o) of the SICA, 1985. On account of the industrial slump and recession, and the factories, of U.P. State Textile, which Corporations which were situated at Jaspur and Kashipur were suffering from industrial sickness, there was no possibility of its rehabilitation and due to there being disruption in the production activity since die, it is an admitted case of both the parties to the writ petition that the two Units of the UP State Textile Corporation, situated at Jaspur and Kashipur, they have finally closed down, since October 1988 by way of a declaration under SICA.

During this period, what would be important for consideration for the present writ petition is that on the basis of recommendation made to the Government for the purposes of declaring the aforesaid Units as to be sick, various meetings between the Government and the Management of the Company was conducted and consequently as a result of the meeting, which was ultimately held on 26th February 2003, the formal closer of the two units at Jaspur and Kashipur was declared to have been made on 31st March 2001. As far as this declaration of closure which was formally made, with effect from 31st March 2001, is yet again not a bone of contention or dispute by any of the parties to the writ petition. Rather to the contrary, this declaration of the closer as effectively notified w.e.f. 31st March 2001, the same formally stands accepted in pursuance to the proceedings conducted by the District Magistrate on 1st July 2003, where there was a formal declaration accepted of the closure of the two Units with effect from 31st March 2003.

Ultimately, various processes of handing over of the Units after its declaration as to be sick after its closer made on 31st March 2001, the handing over process of the Unit to the Government was being carried and was in process, when the controversy emerged at the behest of the petitioner with regard to the payment of the wages for the certain unpaid period, which they claim was due to be paid after the formal declaration of closer that is w.e.f. 1st April 2001 till 9th January 2005, wherein they contend that as per the wages, which was due to be paid to them at the prevalent rate at which it was to be remitted he would be in fact entitled to receive a total amount of Rs. 1,49,000/- for the aforesaid period that is w.e.f. from 1st April 2001 till 9th January 2005, which he contends is a period, for which he has actually worked with the petitioner despite of the closure of the Unit as sick unit, with effect from 31st March 2001.

In support of his contention, the learned counsel for the private respondent-workman has come up with the case that in fact even after an official declaration of closer on 31st March 2001, the fact which he has tried to be substantiated before the labour Court on a reference being sought to the proceedings under Section 33C2, is to the effect that though there was an official closer on 31st March 2001, but in fact, even thereafter closure the respondent case is that he continued to work in the said capacity of electrician till the submission of his VRS in pursuance to the Scheme floated by the Government on 6th December 2004.

It is not in dispute and as also apparent from the pleadings between the parties that when the Scheme of VRS was floating on 6th December 2004, inviting options of VRS from the workman, who are already working in the aforesaid two Units, situated at Kashipur and Jaspur, it is an admitted case of the respondent-workman that on 4th January 2005, he has accepted the propriety of the Government Order dated 6th December 2004 of inviting the VRS and in relation thereto, he has submitted an affidavit, which finds place on record as evidence before the labour Court as well as before this Court. It was by way of declaration made by the workman himself to the following effect:-

"घोषणा पत्रमैं

अरशदजमाल पुत्र श्री मो0 अहमदखां निवासी वर्तमान में मैं कृषि कार्य/स्वयं का कारोबार/ प्राइवेट/सरकारी संस्था में कार्यरत हूँ । यह घोषणा करता हूँ कि मैंने अपने समस्त वैधिक प्राप्तियॉ तथा स्वैच्छिक सेवायोजना/छटनी क्षतिपूर्ति के तहत लाभार्थ सहित समस्त क्षतिपूर्ति/मुआवजा, काशीपुर/जसपुर कताई मिल (उत्तरॉचल सरकार संस्थान की संस्था सिडकुल के उपक्रम) से प्राप्त कर लिया है। अब काशीपुर/जसपुर कताई मिल की सेवा के प्रति मेरा कोई शेष बकाया नहीं है तथा कताई मिल की सेवा से मैंने अपनी मर्जी व बिना किसी दबाव के स्वैच्छिक सेवा निवृत्ति योजना/छटनी क्षतिपूर्ति योजना (शासनादेश संख्याः 3454/7/488-प्दकण्/04, दिनांकः 06.12.04) के तहत समस्त वैधिक देयों की प्राप्ति कर ली है। भविष्य में मेरा या मेरे किसी वारिस का इस विषय में दावे का कोई अधिकार नहीं रहेगा।

मैं पुनः घोष्णा करता हूँ कि मैं किसी भी सार्वजनिक विभाग (प्रदेश/केन्द्रीय) में कार्यरत नहीं हूँ और मुझे इस बात की जानकारी भी है कि स्वैच्छिक सेवा निवृत्ति योजना का लाभ लेने के उपरान्त मैं किसी सार्वजनिक विभाग में नियुक्ति का हकदार नहीं हूँ । यदि मैं किसी सार्वजनिक विभाग (केन्द्रीय/प्रादेशिक) में नियुक्ति ग्रहण करता हूँ तो मैं स्वैच्छिक सेवा निवृत्ति के तहत प्राप्त धनराशि को उत्तरॉचल सरकार के पास तुरन्त जमा करवा दूंगा।

Now, apparently, if the affidavit as filed by the workman is taken into consideration as it is, and which constituted to be the ultimate foundation for acceptance of the VRS proposal, extended by him, he has submitted that at the stage when he has submitted the propriety of the government order dated 6th December 2004, for extending the option for accepting the VRS, he has specifically made a statement recorded in his declaration at the time of submission of his options / declaration of acceptance of VRS, that the entire dues, payable to him by the employer/ petitioner has been remitted and the same has been voluntarily accepted by the workman. It is at this stage where a distinction is being sought to be carved out by the rival contention of the parties to the present writ petition with regards to the declaration made, with regards to acceptance of total payable dues by the employer petitioner.

The petitioner's contention is that a simplicitor reading of the said affidavit, as admittedly which has been submitted by the workman as soon as a decipher is made by the workman on submission of the VRS in pursuance to the government order dated 6th December 2004, and more particularly, when it makes an observation by way of affidavit that the entire amount due has already been remitted to the workman, it has to be read as if the entire due in fact which was payable on the date of the submission of an option of VRS that was remitted to the workman, whereas on the contrary, the stand of the workman as of now is that since the VRS, which was enforced in pursuance to the government order dated 6th December 2004, was logically flowing from an official declaration of closer made on 31st March 2001, in that eventuality, the declaration made in the said affidavit with regards to the acceptance of the entire amount due to be paid will have to be read as to be an amount which was due to be paid as on the date when there was an official declaration of the closure of the Units that is 31st March 2001, and hence on that premise, he has submitted that since admittedly as per the documents which was produced by the employer themselves in the proceedings before labour Court that is a certificate to show that the respondent was in fact effectively working even after the declaration of the official closer on 31st March 2001. The workman submits that the said certificate by the employer will itself lead to an inference that he has worked even thereafter with effect from 1st April 2001, hence he would be entitled for the wages till the time his VRS was accepted by the employer on 4th January 2005, or at the most till the respondent actually dispensed the services. It was on 9th January 2005, the claim, which was raised by the respondent before the labour Court by seeking a reference under Section 33C(2) of the Industrial Disputes Act, 1947, which was numbered as Miscellaneous Adjudication Case No. 49 of 2009.

Under the aforesaid backdrop of controversy, the respondent-workman has approached before the learned labour Court by seeking a reference of a dispute by invoking the provisions contained under Section 33C2 of the Industrial Disputes Act, 1947, which is quoted hereunder:-

33C. Recovery of money due from an employer -

(2) Where any workman is entitled to receive from the employer any money or any benefit which is capable of being computed in terms of money and if any question arises as to the amount of money due or as to the amount at which such benefit should be computed, then the question may, subject to any rules that may be made under this Act, be decided by such Labour Court as may be specified in this behalf by the appropriate Government 3[within a period not exceeding three months ].

4[Provided that where the presiding officer of a Labour Court considers it necessary or expedient so to do, he may, for reasons to be recorded in writing, extend such period by such further period as he may think fit]"

This Court is of the view that as per the intention of legislature by legislating Section 33C(2) and in order to bring the claim of the respondent/workman with regards to the wages for the period from 1st April 2001 till 9th January 2005, as claimed to be within the ambit provisions contained under Section 33C2. This Court is of the opinion and confirmed view that it is incumbent that the said claim for the aforesaid period should first and foremost satisfy the terms of the said provision, which contemplates that there has had to be a prior determination of liability or claim by a competent authority i.e. prior in time and the said determination of liability, when it has not being paid despite determination then only the provisions contained under Section 33C2 of the Industrial Disputes Act, 1947, would be attracted or could be invoked for redressal of grievance of settled liability.

The question which emerges consideration is, as to whether on the date when the reference was sought in 2009 whether there was a prior outstanding determination of liability to be paid by employer so as to bring the controversy within the ambit of the provisions contained under Section 33-C(2), apparently looking to the facts of the dispute, it will not fall to be under the provisions of Section 33-C(2) of the Industrial Disputes Act, 1947, or within its ambit of consideration, for the reasons that even according to the respondent-workman's case also, where the date of closer is not in controversy and even according to the documents, which he has placed reliance by the workman i.e. the certificate in order to fortify the fact that he was continuously serving even after the closer of the Unit, it only determines that he has worked thereafter with effect from 1st January 2002 till 9th January 2005 only.

This aspect, pertaining to that he discharge his duties for the said period is not a disputed fact by the employer that the respondent has not worked with the petitioner for the aforesaid the said period i.e. the period for which the certificate was issued by the petitioner/employer. But there is nothing on record as such placed by either of the parties to the proceedings of writ petition as to whether the respondent has actually discharged his duties for the period from 1st April 2001 till 1st January 2002, and in fact, on an appreciation of the document, which is on record, rather there is no such document to show that he has actually worked for the aforesaid period hence, according to the documents, relied by the respondent himself, his continuity in the job is only shown to be established by the evidence with effect from 1st January 2002 till 9th January 2005.

Since at the stage when the reference was being sought with regards to the claim of wages from 1st January 2002 till 9th January 2005, as it has already been observed above that since the aforesaid claim is not satisfying the determination as it has to be made within the ambit of the provisions contained under Section 33-C(2), the claim raised by the respondent/workman by way of reference before the labour Court for the period after the closer of the Unit till 9th January 2005, it will be outside the ambit of consideration of Section 33-C(2), and hence it couldn't have been determined by the learned labour Court under the aforesaid provisions.

The contention of the learned counsel for the respondent is that the inference, which is required to be drawn on the declaration which has been submitted by the workman at the time when the VRS scheme dated 6th December 2004, was being enforced and his undertaking given before the competent authority for accepting the terms of the VRS, his contention that it has to be stretched for a period from 1st January 2004 till 9th January 2005 also, this Court, with all humility, at its command, is not willing to accept the aforesaid contention in the absence of there being a specific plea, raised by the workman in relation to the said declaration either before the labour Court or even at the time when the declaration itself was being filed to distinguish that the claim, which was submitted by the respondent-workman by way of clarification by pleading that the declaration was only confined with regards to the wages, which is payable to him till 31st March 2001 only. In such an eventuality, and with a normal logic, which would follow is that the invitation of the options for VRS in pursuance to the government order dated 6th December 2004, was nothing but as a consequential step in lieu of the official declaration of closure dated 31st March 2001, and hence the implications of the government order dated 6th December 2004, will always have a nexus from an official declaration of the closer made on 31st March 2001, and I am of the opinion that as soon as the declaration is made in pursuance to the government order dated 6th December 2004, wherein an admission has been made by the workman with regards to the remittance of the entire amount due to be paid, it will amount to be a determination of dues, which fell due as a consequence of his continuation into the job, this would operate as bar of estoppel against him to raise a claim to the contrary by making a reference, even after the declaration of the closer till the date of his actual submission of the VRS. Hence, the contention raised to the contrary by the learned counsel for the respondent is not accepted by this Court.

The learned counsel for the respondent has tried to draw a distinction by drawing the attention of this Court to the provisions contained under Section 25-FFF of the Industrial Disputes Act, 1947, which reads as under:-

"25FFF - Compensation to workmen in case of closing down of undertakings (1) Where an undertaking is closed down for any reason whatsoever, every workman who has been in continuous service for not less than one year in that undertaking immediately before such closure shall, subject to the provisions of sub-section (2), be entitled to notice and compensation in accordance with the provisions of section 25F, as if the workman had been retrenched:

Provided that where the undertaking is closed down on account of unavoidable circumstances beyond the control of the employer, the compensation to be paid to the workman under clause (b) of section 25F, shall not exceed his average pay for three months.

[Explanation.--An undertaking which is closed down by reason merely of-(i) financial difficulties (including financial losses); or (ii) accumulation of undisposed stocks; or (iii) the expiry of the period of the lease or licence granted to it; or (iv) in case where the undertaking is engaged in mining operations, exhaustion of the minerals in the area in which operations are carried on, shall not be deemed to be closed down on account of unavoidable circumstances beyond the control of the employer within the meaning of the proviso to this sub-section.]

[(1A) Notwithstanding anything contained in sub-section (1), where an undertaking engaged in mining operations is closed down by reason merely of exhaustion of the minerals in the area in which such operations are carried on, no workman referred to in that sub-section shall be entitled to any notice or compensation in accordance with the provisions of section 25F, if--

(a) the employer provides the workman with alternative employment with effect from the date of closure at the same remuneration as he was entitled to receive, and on the same terms and conditions of service as were applicable to him, immediately before the closure;

(b) the service of the workman has not been interrupted by such alternative employment; and

(c) the employer is, under the terms of such alternative employment or otherwise, legally liable to pay to the workman, in the event of his retrenchment, compensation on the basis that his service has been continuous and has not been interrupted by such alternative employment.

(1B) For the purposes of sub-sections (1) and (1A), the expressions "minerals" and "mining operations" shall have the meanings respectively assigned to them in clauses (a) and (b) of section 3 of the Mines and Minerals (Regulation and Development) Act, 1957 (67 of 1957).]

(2) Where any undertaking set-up for the construction of buildings, bridges, roads, canals, dams or other construction work is closed down on account of the completion of the work within two years from the date on which the undertaking had been setup, no workman employed therein shall be entitled to any compensation under clause (b) of section 25F, but if the construction work is not so completed within two years, he shall be entitled to notice and compensation under that section for every4[completed year of continuous service] or any part thereof in excess of six months.]"

The provisions of Section 25-FFF of the Industrial Disputes Act, 1947, if read in precision, it pertains to the determination of the actual compensation due, which is payable to the workman in case of a closure of the Unit and in that eventuality, the implications of its determination has to be made as per the norms settled by the Schedule, contained in the Act, which is altogether dealing with a different contingency, than the contingency, which was under consideration before the labour Court in the instant case with regards to the payment of the amount, which was after the date of the closer of the Unit till the date of the submission of the VRS declaration by the workman.

Even if Section 25-FFF is taken into consideration, it was only dealing with the implications of the actual affect of official declaration of closer vis-a-vis the compensation which was to be paid to the workman as a consequence of the closing down. This Court is of the view that if a pragmatic interpretation is given to Section 25-FFF, and which has to be read with a declaration made under Section 15 of the SICA of closure of the Unit after having being declared as sick, it would be inclusive of it the determination of compensation, which has resulted into a consequential action of invitation of the VRS from the workman, who has, as claimed, has worked even beyond the period of its official declaration of closer. Hence, Section 25-FFF at this stage will not be of any avail to the respondent-workman for determining his claim for the wages for the period from 1st April 2002 till 9th January 2005. The aforesaid contention that in either of the circumstances under Section 25-FFF or under Section 33C2 of the Industrial Disputes Act, 1947, will not be of any beneficial interpretation for the respondent-workman, particularly, when being conscious of the fact that the services of the respondent-workman stood determined due to the invitation of the VRS and if at all there was any retrenchment then the appropriate recourse available to the respondent would have been to question the retrenchment itself by invoking the provisions contained under Section 10A of the Industrial Disputes Act, 1947.

Since there was no such reference sought with as against the retrenchment of the dispute for its determination and the closer, the submission of the VRS, the submission of declaration of VRS are the facts which are not in controversy, and also because of the fact that the certificate of the continuous service was also yet another fact by the workman at the most whatsoever the salary which was due to be paid would be deemed to have been remitted by the employer as soon as he himself has given his option for VRS, which ultimately stood accepted by the employer on 4th January 2005, giving a declaration of having accepted the entire amount.

Consequently, the interpretation which has been given by the Industrial Tribunal in the impugned award under challenge dated 13th July 2012, as well as, the consequential miscellaneous proceedings, resulting into passing of an order dated 14th December 2012, directing the petitioner to remit the wages for the period from 1st April 2001 till 9th January 2005 is contrary and de hors to the evidence on record and law as argued before the Court below, which was not considered in its true perspective and particularly, the impact of non-seeking of a reference against the retrenchment of the workman as a consequence of the closer made officially with effect from 31st March 2001.

Hence, for the reason aforesaid, this Court is of the view that the analogy determined by the labour Court for granting of the aforesaid benefit is contrary to the evidence on record and contrary to its interpretation, hence the writ petition succeeds, the impugned award dated 31st December 2012, as well as, the consequential order dated 14th December 2012 are hereby quashed.