Gujarat High Court Case Information System
Print
MCA/2110/2009 2/ 25 JUDGMENT
IN
THE HIGH COURT OF GUJARAT AT AHMEDABAD
MISC.CIVIL
APPLICATION No. 2110 of 2009
In
SPECIAL
CIVIL APPLICATION No. 14632 of 2007
For
Approval and Signature:
HONOURABLE
MR.JUSTICE H.K.RATHOD
=========================================================
1
Whether
Reporters of Local Papers may be allowed to see the judgment ?
2
To be
referred to the Reporter or not ?
3
Whether
their Lordships wish to see the fair copy of the judgment ?
4
Whether
this case involves a substantial question of law as to the
interpretation of the constitution of India, 1950 or any order
made thereunder ?
5
Whether
it is to be circulated to the civil judge ?
=========================================================
THE
AHMEDABAD ADVANCE MILLS LTD. - Applicant(s)
Versus
THE
TEXTILE LABOUR ASSOCIATION & 1 - Opponent(s)
=========================================================
Appearance
:
MR
SI NANAVATI, SR. ADVOCATE FOR NANAVATI & NANAVATI
for
Applicant:1,
RULE SERVED for Opponent(s) : 2.
MR DS VASAVADA
for Opponent(s) :
1,
=========================================================
CORAM
:
HONOURABLE
MR.JUSTICE H.K.RATHOD
Date
: 18/01/2010
ORAL
JUDGMENT
1. Heard
learned Senior Advocate Mr.S.I.Nanavati for Nanavati & Nanavati
on behalf of applicant, learned advocate Mr.D.S.Vasavada for opponent
No.1 and Mr.Danial, learned Union Representative appearing on behalf
of opponent No.2 concerned employee.
2. This
Court has passed an order on 21.12.2009, which is quoted as under :
1. Heard
learned senior advocate Mr. S.I. Nanavati appearing on behalf of
applicant, learned advocate Mr. Vasavada appearing on behalf of
opponent No.1 and Mr. Danial, learned union representative of
opponent No.2.
2. Considering
the submissions made by both learned advocates and averments made in
this application and also the affidavit filed by respondent No.2, the
question raised in this application requires detailed examination.
Hence, Rule returnable on 18.1.2010.
3. Meanwhile,
interim relief in terms of Para.11(C) till final disposal of this
application.
3. Before
considering merits of the matter, it is necessary to consider order
passed by this Court in SCA No.14632 of 2007. In SCA, petitioner has
challenged the order passed by Industrial Court, Ahmedabad in Appeal
(IC) No.27 of 2006 against the order of Labour Court in Application
No.294 of 1996 dated 7.5.2007. The Industrial Court, Ahmedabad has
allowed the appeal filed by respondent Union and judgment and order
passed Labour Court on 10.4.2006 in BIR Application No.294 of 1996
has been set aside. The Industrial Court has declared that there was
a closure of the mills company from 23.5.1996 onwards and permission
for closing down was not obtained from the appropriate Government.
Therefore, said closure was declared illegal. The consequential
benefits of holding of illegal closure shall be paid by mills company
to the concerned employee with the cost of rs.500/-. The Rule issued
by this Court on 8.1.2008 and ad-interim relief granted by this
Court. Thereafter, matter has been discussed number of occasions
between the parties to find out some solution in respect to question
involved in the present petition. Thereafter, matter has been settled
between the parties. It is necessary to note that opponent No.1
TLA being a union representative under provisions of BIR Act,1946.
The terms of settlement has been worked out between the parties and
produced on record by both parties. The consent terms has been
produced on record and according to consent terms, benefits which
were available to concerned employees of tendering their voluntary
resignation, retired employees, expired employees and Badli
employees has been worked out on agreement between the parties to the
effect that mills has closed down manufacturing activities completely
and it has been agreed to grant following benefits as per the
settlement to the concerned employee. This consent terms dated
11.2.2008 signed by both advocates of respective parties as well as
Shri S.D.Vyas, Director of Ahmedabad Advance Mills Ltd. and Shri Amar
Barot, Secretary of TLA.
4. This
Court has passed the order on 11.2.2008 recording settlement. The
order which has been passed by this Court on 11.2.2008 in aforesaid
SCA, paras.5, 6, 7 and 8 are relevant which are quoted as under :
5. I
have perused the consent terms arrived at between the parties. The
matter has been rightly settled and both the parties have rightly
agreed to the terms which is in the interest of both the parties. The
result of this settlement is that the order passed by the Industrial
Court, Ahmedabad which is under challenge declaring the closure of
the mills company is illegal, is now considered to be a closure
declared by the mills company is legal and valid, which is accepted
by the respondent union and all the concerned employees along with
representative of respondent-union who has given writing to this
Court dated 28/1/2008.
6. The
aforesaid consent terms is taken on record and accordingly, the order
passed by the Industrial Court, Ahmedabad in Appeal (IC) No.27 of
2008 dated 7/5/2007 is hereby modified in terms of consent terms and
both the parties are directed to abide by consent terms and it is
directed to both the parties to implement the consent terms as
recorded by this Court.
7. Rule
is made absolute in terms of consent terms with no order as to costs.
8. It
is necessary to note that long pending dispute is now reached to the
happy settlement, where, rupees fifteen crores are to be disbursed in
favour of the concerned employees with the sincere efforts made by
Mr.Amar Barot, Secretary of Textile Labour Association and showing
positive approach in all respect getting the result of long pending
dispute in good settlement. This Court is really appreciated the
sincere efforts of Mr.Amar Barot, Secretary of TLA being a
representative of Union in local area in Textile Industry. It is
simultaneously happy to note the positive approach of the employer
leaving a legal battle aside and settled the dispute in a positive
manner which is ultimately, beneficial to the concerned employees.
Therefore, this Court also appreciated the sincere efforts of learned
senior advocate Mr.S.I.Nanavati, learned advocate Ms.Anuja Nanavati
learned advocate and Mr.D.G.Shukla who have helped through out in the
proceedings. This Court also appreciated the sincere effort of
learned advocate Mr.D.S.Vasavada.
5. The
aforesaid paragraphs are quoted by this Court for deciding
controversy arise between the present applicant and opponent No.2.
This Court has observed that net result of this settlement is that
the order passed by Industrial Tribunal, Ahmedabad which is under
challenge declaring closure of the mills company is illegal, is now
considered to be a closure declared by the mills company is legal and
valid which is accepted by the respondent Union and all the concerned
employees along with representative of respondent Union, who has
given writing to this Court dated 28.1.2008. This Court while taking
consent terms on record, modified order passed by Industrial Court,
Ahmedabad in Appeal (IC) No.27 of 2008 dated 7.5.2007. In terms of
consent terms, both parties are directed to abide by consent terms
and it is directed to both the parties to implement the consent terms
as recorded by this Court and Rule is made absolute in aforesaid SCA
in terms of consent terms with no order as to costs.
6. Therefore,
whatever benefits accrued in favour of concerned employees as per
consent terms are to be calculated on the basis of legal closure of
petitioner mills. The opponent No.2 herein has filed application
before the controlling authority which is at Page-27 (Form-I) dated
31.7.2008. The date of appointment is 1.7.1954 and date of
termination means voluntary resignation dated 15.4.2008, total period
of service is 54 years and daily wage is considered at Rs.143.41 ps.
The difference of gratuity has been calculated which comes to
Rs.35,220.10 ps which is at Page-27 of compilation. Thereafter, on
5.3.2009, mills company has filed reply against claim of opponent
No.2. The application is registered by competent authority being
Application No.63 of 2009 on 16.4.2009.
7. The
present applicant mills company has filed present application
with a prayer to issue necessary direction to the controlling
authority, Ahmedabad modifying / clarifying the earlier order dated
11.2.2008 passed by this Court in SCA No.14632 of 2007 and to quash
the proceedings of Application No.63 of 2009 filed by opponent No.2
before the controlling authority.
8.
The affidavit-in-reply filed by opponent No.2 against present
application with authority of union representative Mr.P.K.Danial,
General Secretary of mighty Labour Association.
9. Mr.S.I.Nanavati,
learned Senior Advocate, submitted that in pursuance to aforesaid
consent terms and order passed by this Court on 11.2.2008, opponent
No.2 has tendered his voluntary resignation on 15.4.2008 and that
resignation was accepted by mills company as per settlement recorded
by this Court and to be paid amount on or before 31.5.2008. This
letter where voluntary resignation was accepted, has been
communicated immediately to opponent No.2 which bears signature of
opponent which is at page-23. Page-24 is a letter of opponent No.2
where it is mentioned that on the basis of settlement arrived at
between representative union TLA and mills company as well as order
passed by this Court on 11.2.2008, whatever terms and conditions
decided between the parties has been accepted by opponent No.2 –
workman and requested mills company to pay whatever dues available as
per consent terms to him. In the said letter, it is also made clear
by opponent No.2 that he has not filed any case or proceedings
against mills company and even in case if any such case is filed, he
has given undertaking to mills company to withdraw it voluntarily. He
is not having any other premises or quarters with him or any property
of company with him. Even if any property is remained with him, he is
prepared to give vacant possession to mills company. This letter at
page-24 is signed by opponent No.2 workman in presence of
witness, who has also signed in the said letter. Thereafter, a
receipt has been given by opponent No.2 (page-25) as per settlement
recorded by this Court as referred above, total amount comes to
Rs.78,478/- and after deducting various deduction, Rs.24,151/- as
agreed between both parties, remaining amount of Rs.54,327/- has been
paid to opponent No.1 by Cheque No.717731 dated 10.6.2008 drawn on
SBI Commercial Branch, Ashram Road, Ahmedabad. This receipt is also
signed by opponent No.2 on 14.6.2008 in presence of union
representative. Thereafter, Rs.80,942/- amount of gratuity is also
paid as per consent terms (page-26) which has also been accepted by
opponent No.2. Thereafter, Form-I has been preferred which was sent
to mills company by opponent No.2 on 31.7.2008 claiming difference of
amount calculating the interim period of closure upto 15.4.2008.
Thereafter, mills company has filed reply on 5.3.2009 (page-28) to
controlling authority under Payment of Gratuity Act,1972. After reply
of mills company, opponent No.2 has filed application No.63 of 2009
before the controlling authority on 16.4.2009 claiming difference of
gratuity amount which comes to Rs.35,220.10 ps. These are the facts
which are on record.
10. In
light of these facts which are almost undisputed between parties
based on documents which referred by this Court as above.
11. Mr.S.I.Nanavati,
learned Senior Advocate relying upon the decision of Apex Court in
case of Shivanand Gaurishankar Baswanti v. Laxmi Vishnu Textile Mills
& Ors. reported in 2008 AIR SCW 8122, submitted that once the
representative union arrived at an agreement or consent terms with
mills company, then concerned employee opponent No.2 has no right
to challenge the consent terms. He also raised contention that
consent terms has been accepted by opponent No.2 and accordingly,
voluntary resignation was tendered by him which was accepted by mills
company and according to consent terms which was recorded by this
Court on 11.2.2008, necessary due payment was already made which was
accepted by opponent No.2. Therefore, now to file application before
controlling authority claiming difference of amount of gratuity is
not maintainable in law and the controlling authority has no
jurisdiction to decide such application when amount of gratuity has
been determined on the basis of consent terms with representative
union. He relied upon certain terms of settlement which is quoted as
under :
5. It
is agreed by and between the parties that as per the present
settlement the Petitioner Mills will be completely closed for all
purposes and the Respondent Union or its members / employees who are
the beneficiaries under the present settlement will not raise any
dispute about the closure of the petitioner Mills.
12. He
emphasized vehemently that after accepting consent terms and
tendering voluntary resignation and accepting amounts by opponent
No.2, filing of an application No.63 of 2009 under provisions of
Payment of Gratuity Act is contrary to order passed by this Court
dated 11.2.2008 and it is nothing but an abuse of process of law
which may result into multiplicity of proceedings. The controlling
authority ought not to have proceed with such application after the
reply filed by applicant mills co. whereby attention of controlling
authority was drawn about the order passed by this Court on
11.2.2008. The undertaking given by opponent No.2 accepting the order
passed in terms of settlement / consent terms dated 11.2.2008.
Therefore, any proceedings initiated by controlling authority in
response to application No.63 of 2009 filed by opponent No.2 is
without jurisdiction and contrary to order passed by this Court. He
submitted that order passed by this Court dated 11.2.2008 recording
consent terms is not challenged by opponent No.2 to any higher forum.
He further submitted that once consent terms arrived by mills co.
with representative union, then opponent No.2 is having no locus
standi to challenge the order passed by this Court dated 11.2.2008.
He also submitted that consent terms arrived between mills co. and
representative union under provisions of Bombay Industrial Relations
Act,1946. Therefore, controlling authority has no jurisdiction to
entertain such application filed by opponent No.2. Therefore,
entertaining such application by controlling authority itself is
against the order passed by this Court dated 11.2.2008 and also it is
contrary to the provisions of Bombay Industrial Relations Act,1946.
Therefore, that proceedings is required to be quashed. He relied upon
Para.31, 32, 39, 43, 44, 45 and 46 of aforesaid decision of Apex
Court which is quoted as under :
STATUS
AND POSITION OF REPRESENTATIVE UNION
31. The
learned counsel for the appellant contended that respondent No. 8
could not have agreed to accept a meager amount
of Rs.22 crores when the outstanding dues were more than Rs.130
crores. It was also stated that majority of workers are with the
appellant and they are opposed to the settlement. Thousands of
workers have so stated in writing and informed
the appellant that the grievance raised by
the appellant is well-founded and they are entitled to much more
amount than what had been paid under the settlement.
32. Even this contention has no force. The learned counsel for the Union, in our opinion, is right in
submitting that under the Bombay Industrial Relations Act, 1946, it
is the `Representative Union which has all powers to enter into a
settlement on behalf of workers in the industry and it is only that
Union which can take a decision under 1946 Act. The said decision
would bind not only the members of the Union, but also to those
workers who are not members of such Union.
39. This
Court considered the relevant provisions
of the 1946 Act, the object underlying
conferment of power on
Representative Union and the action taken by it and held
that when a Representative Union appears in any
proceeding under the Act, none else can be allowed to appear not even
the employee at whose instance proceedings might have been started
under Section 42(4) of the Act. The Court held that if the
Representative Union appears, the decision taken by that Union would
be final and binding.
43. The
Court, therefore, concluded;
The
result therefore of taking SS. 27A, 32 and 33 together is that s. 27A
first places a complete ban on the appearance of an employee
in proceedings under the Act once it has commenced except
through the representative of employees. But there are two
exceptions to this ban contained in SS. 32 and 33. Section 32 is
concerned with all proceedings before the authorities and gives power
to the authorities under the Act to permit an employee himself to
appears even though a representative of employees may have
appeared but his permission cannot be granted where the
representative Union has appeared as a representative of employees.
Section 33 which is the other exception allows an employee to appear
through any person in certain proceedings only even though a
representative of employees might have appeared; but here again it
is subject to this that no one else, not even the employee who might
have made the application, will have the right to appear
if a Representative Union has put in appearance as the
representative of employees. It is quite clear therefore that the
scheme of the Act is that where a Representative Union appears in any
proceeding under the Act, no one else can be allowed to appear not
even the employee at whose instance the proceedings might have begun
under s. 42(4). But where the appearance is by any representative of
employees other than a Representative Union authorities under s. 32
can permit the employee to appear himself in all proceedings before
them and further the employee is entitled to appear by any person in
certain proceedings specified in s. 33. But whenever the
Representative Union has made an appearance, even the
employee cannot appear in any proceeding under the act and the
representation must be confined only to the representative
Union. The complete ban therefore laid by s. 27A on representation
otherwise than through a representative of employees
remains complete where the representative of employees is the
Representative Union that has appeared; but if the
representative of employees that has appeared is other than the
Representative Union then SS.32 and 33 provide for exceptions with
which we have already dealt. There can therefore be no escape
from the conclusion that the Act plainly intends that
where the Representative Union appears in any proceeding under the
Act even though that proceeding might have commenced by an employee
under s. 42(4) of the Act, the Representative Union alone can
represent the employee and the employee cannot appear or act
in such proceeding .
44. Again,
in Textile Labour Association, Bhadra, Ahmedabad v.
Ahmedabad Mill Owners Association, Ahmedabad, (1970) 3 SCC
890, this Court held that once Representative Union of Textile
Industry in the local area of Ahmedabad entered into a
compromise, such compromise would bind all
the employees and those employees who are not
members of the Representative Union cannot contend that they are
against such compromise and are not bound by it.
45. In
Santuram Khudai v. Kimatrai Printers & Processors Pvt. Ltd. &
Ors., (1978) 1 SCC 162, a similar question arose. The Court
reiterated the law laid down in Girja Shankar and held that
once the Representative Union appears on behalf
of the employees in a proceeding before
a Labour Court under 1946 Act, individual workman has
no locus standi. According to the Court, combined
reading of Sections 27A, 30, 32, 33 and 80 of the Act make
it clear that consistent with the avowed policy and prevention of
exploitation of workmen and augmentation of their
bargaining power, the Legislature has clothed the
Representative Union with plenary power to appear or act on behalf of
employees in any proceeding under the Act. Keeping in view the said
object, it has deprived individual employees or workmen of the right
to appear or act in any proceeding under the Act where the
Representative Union enters appearance or acts as
representative of the employees.
46. Following
Girja Shankar, the Court observed that mala fides
or bona fides of the Representative Union has no
relevance in construing the relevant provisions of the Act. In case
the employees find that the
Representative Union is acting in a manner which
is prejudicial to their interests, their remedy lies in
invoking the aid of the Registrar under
Chapter III of the Act requesting him to cancel the
registration of the union.
13. As
against that, Mr.Danial, Union Representative, who has filed reply in
affidavit against present application, raising contention that
applicant has paid the gratuity to opponent No.2 workman in
different two rates which is as per the settlement arrived between
the applicant Mills Co. and TLA which is contrary to mandatory
provisions of Gratuity Act and two different rates have been taken
into account while calculating amount of gratuity; one is Rs.121.12
ps. and second is Rs.143.41 ps. which quite against the Gratuity Act.
He submitted that such type of different calculation is not
permissible under the provisions of Gratuity Act and settlement or
order cannot change mandatory right of eligible person. Therefore,
even if it is done then it is nothing but a breach of law. The
consent terms cannot consider as a right thing and union
representative is not empowered to decide the fate of the workman
through settlement especially when settlement is against the
prevailing laws and its mandatory provisions. He relied upon decision
of Bombay High Court reported in 2002 II CLR 395. Therefore,
according to his submission, such settlement or consent terms is not
proper and contrary to the provisions of Gratuity Act and merely
accepting amount by opponent No.2, he cannot consider to be helpless
for challenging or claiming difference of amount of gratuity. The
resignation cannot consider to be voluntary and for that, he
submitted that resignation has become very sensitive and element of
suspicion arises when the resignation is genuine. He relied upon one
decision of Apex Court in case of G.T.Lad v. Chemicals and Fibres of
India Ltd. reported in 1979 I LLJ 29 (SC). However, he has accepted
in affidavit-in-reply that resignation which was tendered by opponent
No.2 was voluntary because he has no other option with him. But he
was not agreed with the illegal deduction made by Mills Co. The
opponent No.2 has lost Rs.35,220.10 ps. because of illegal settlement
with representative union. Therefore, according to his submission,
such application filed by applicant Mills Co. may be dismissed and
direction be issued to pay Rs.35,220.10 ps. to opponent No.2.
It
is necessary to note that affidavit-in-reply is not filed by opponent
No.2 but, it has been filed by Union Representative Mr.Danial, who is
not the party of present proceedings. Except that, Mr.Danial, Union
Representative has not raised any other contention before this Court.
14. I
have considered submissions made by both learned advocates and
documents which are annexed to present application as well as
affidavit-in-reply filed by Mr.Danial, Union Representative.
15. The
calculation which has been made by opponent No.2 considering his
total service of 54 years from 1.7.1954 to 15.4.2008. The applicant
Mills Co. as per consent terms considered amount of gratuity for 41
years’ service from date of joining upto 31.3.1995. On 31.5.1995,
monthly salary of opponent
No.2 was Rs.3149.31 ps. Accordingly, daily wage comes to Rs.121.12
ps. Total amount comes to Rs.74,489/-. Thereafter, Mills Co. has
considered after three years gratuity w.e.f. 1.4.1997 to 31.12.1999
where total monthly salary comes to Rs.3728.74 ps. where per day
wages comes to Rs.143.41 ps. which amount comes to Rs.6453/-.
Therefore, as per terms of settlement, amount of gratuity is required
to be calculated as per A + B as agreed by Union Representative with
Mills Co. in consent terms. The consent terms provides a clause for
amount of gratuity to permanent retired employees which will be paid
as per award dated 12.2.1997 upto 1.3.1995 and from 1.4.1997 till the
date of retirement for the period from 1.4.1995 to 31.3.1997, lumpsum
payment as per clause-9 of the award dated 12.2.1997. The permanent
employees will be paid gratuity as per award dated 12.2.1997 upto
31.3.1997 and from 1.4.1997 to 31.3.2007, index base is to be taken
from 31.3.1997. So question of last drawn salary is not required to
be taken into account while calculating amount of gratuity on daily
wage of concerned employee. Therefore, amount of gratuity which has
been calculated by Mills Co. on the basis of consent terms as arrived
at between the parties and in case if any dispute arises or
difference may arise in respect of calculation of any amount as per
present consent terms, then matter will be referred to
Mr.S.I.Nanavati, learned Senior Advocate and Mr.D.S.Vasavada, Union
Representative, who will decide it and their joint decision will be
binding to both the parties as well as to the concerned employee and
they will not raise any objection or dispute about such calculation.
Relevant Item No.7 of the consent terms is quoted as under :
7.
It is further agreed by and between the parties that if any dispute
or difference may arise in respect of calculation of any amount as
per present consent terms, then it will be referred to Shri
S.I.Nanavati, Senior Advocate and Shri D.S.Vasavada, Advocate, who
will decide it and their joint decision will be binding to both the
parties as well as to the concerned employee and they will not raise
any objection or dispute about such calculation.
16. The
submission made by Mr.Danial, Trade Union Representative that amount
of gratuity has been calculated in two spells – (A) and (B). Spell
(A) provides that amount of gratuity from date date of joining till
31.3.1995 and Spell (B) provides that amount of gratuity paid from
1.4.1997 to 31.12.1999. In both kind of gratuity, Spell (A) last
drawn wages taken into account on 31.3.1995 and in Spell (B), last
drawn wages taken into account from March,1997 because living index
is taken into account. Therefore, according to him, amount of
gratuity is available to employee under the provisions of Payment of
Gratuity Act,1972 on the basis of last drawn wages which has not been
calculated. Therefore, provisions of Gratuity Act is violated.
16.1 It
it necessary to note that one proceedings initiated by both parties
i.e. TLA Union representative and the Ahmedabad Advance Mills Ltd.
giving submission in Case (IC) No.1/1997 under provisions of the
Bombay Industrial Relations Act,1946 wherein under Section-66
settlement between both parties arrived on 12.2.1997 and accordingly,
that settlement has been recorded by Industrial Court on 12.2.1997.
Therefore, as per terms 6(C), the gratuity is required to be
calculated from date of joining of concerned employee upto 31.3.1995
on basis of receiving salary by concerned employee on 31.3.1995. This
settlement has been arrived because of discontinuation of certain
departments and to accept voluntary resignation from concerned
employees and whatever posts are found to be vacant, that posts are
required to be abolished. For that, specific settlement has been
arrived with representative union by applicant mills co. Therefore,
part (A) calculation made upto 31.3.1995 as per settlement dated
12.2.1997 which was produced before controlling authority.
Thereafter, subsequent period, Part (B) was taken into account from
1.4.1997 to 31.12.1999. Both kind of gratuity has been calculated on
basis of two separate agreement arrived by representative union with
applicant Mills Co. That agreements are binding to concerned opponent
No.2 and accordingly, benefit of gratuity has been calculated for
total years of service which comes to 41 years. The opponent No.2 in
its form-I considered his service to be continued upto 15.4.2008
which is not correct because by second agreement which was recorded
by this Court on 11.2.2008 where specific agreement arrived between
both parties that closure of the mills co. is held to be legal and
valid which is accepted by the respondent Union and all the concerned
employees along with representative of respondent Union, who has
given writing to this Court dated 28.1.2008. Therefore, a moment
closure is considered to be legal, then thereafter there is no
further period is available to concerned employee to claim gratuity.
Therefore, considering both agreements dated 12.2.1997 and order
passed by this Court on 11.2.2008, the amount of gratuity in respect
to opponent No.2 has been properly calculated by applicant Mills Co.
If there is an error in calculation, the remedy is available to
opponent No.2 to approach Advocate of Representative Union and
learned Senior Advocate Mr.S.I.Nanavati as per order passed by this
Court on 11.2.2008 but, there is no remedy is available as per
binding agreement to concerned opponent No.2 to approach directly to
controlling authority under the provisions of Payment of Gratuity
Act.
16.2 Mr.Danial,
learned Union Representative has referred and relied upon recent
decision of Apex Court in case of Allahabad Bank & Anr. v. All
India Allahabad Bank Retired Employees’ Association reported in 2010
I CLR 1 = 2009 AIR SCW 7667 and 2009 (4) Scale 577. He relied upon
recent decision of Apex Court in respect to gratuity where question
was considered by Apex Court whether the retired employees having
exercised their option to avail the benefits under the pension scheme
are estopped from claiming the benefit (i.e. gratuity) under the
provisions of the Payment of Gratuity Act. Answering this question by
Apex Court in the negative, the Apex Court has held that right to
receive gratuity under the provisions of the Act cannot be defeated
by any instrument or contract. The pension and gratuity are separate
retiral benefits and right to gratuity is a statutory right. No
comparison between a pension scheme, not providing for payment of
gratuity and right of employee to receive gratuity under the
provisions of the Act. Therefore, appeal preferred by Allahabad Bank
has been dismissed. So aforesaid decision of Apex Court is not
applicable to facts of this case because here amount of gratuity has
been paid to opponent No.2 by applicant Mills Co. which has been
accepted by him on basis of two agreements dated 12.2.1997 and
11.2.2008. Both agreements with representative union under provisions
of BIR Act,1946. When both agreements arrived with representative
union by applicant Mills Co. the concerned employees expressly or
impliedly waived their statutory right to claim payment of gratuity
under the provisions of the Act. But their claim of gratuity is
decided in terms of two settlement dated 12.2.1997 and 11.2.2008.
Therefore, observations made by Apex Court in Para.22 and 23 of
aforesaid decision is relevant which are quoted as under :
22.
This Court in Hindustan Lever and Anr. Vs. State of Maharashtra &
Anr.9 relying upon the decision of this Court in Purshottam H. Judye
Vs. V.B. Poddar10 held that the word `instrument would include
award made by the Industrial Tribunal. It is thus clear
that notwithstanding the Desai and Shastry Awards and the subsequent
settlements the members of the employees association are entitled to
avail the benefit conferred upon them for payment of gratuity under
the provisions of the Act. The employees cannot be deprived of their
valuable statutory right conferred upon them to receive payment of
gratuity.
23. There
is no material placed before us that the employees while opting for
the pension scheme at the time of their superannuation/retirement
either expressly or impliedly waived their statutory right to claim
payment of gratuity under the provisions of the Act. In the
circumstances we find no merit in the submission made by the learned
counsel for the appellant in this regard. For the aforesaid reasons
we find no merit in the appeal.
16.3 In
view of above observations made by Apex Court in aforesaid recent
decision, reliance which has been placed by the Mr.Danial, Trade
Union Representative is not helpful to him in support of his
submission. The aforesaid recent decision of Apex Court makes it
clear that in case if employee while opting for the pension scheme at
the time of his superannuation or retirement, either expressly or
implied waived their statutory right, then concerned employees are
not entitled to claim amount of gratuity as per provisions made in
the Payment of Gratuity Act. In this case, by two agreements with
representative union under provisions of BIR
Act, 1946 which is binding to members of representative union and
even also it is binding to non-members means concerned other
employees working with applicant Mills Co. In this case, having
accepted both settlements arrived with representative union and
receiving payments, thereafter to file proceedings under provisions
of Payment of Gratuity Act,1972 is not maintainable. Otherwise there
is no sanctity of both settlements arrived with representative union
by applicant Mills Co. When applicant Mills. Co. negotiated entire
matter where question of closure of Mills Co. was discussed where
number of workers are affected and on principle of collective
bargaining when entire matter has been settled, so employees
concerned may get immediately amount of their legal dues without
being legal fight against applicant Mills. Co. The opponent No.2
has not made any allegation against representative union or there is
no mala fide has been alleged by
opponent No.2 against representative union. At the time of recording
settlement by this Court, this Court has also found that settlement
produced before this Court being settling in respect to all amounts
of legal dues of employee which was in interest of concerned
employees. Therefore, this Court has recorded it and accordingly,
applicant Mills Co. has acted on it. Thereafter, if such separate
application filed before controlling authority if it is to be
entertained, then unnecessary multiplicity of proceedings will be
arisen which is not in interest of either parties because it amounts
to violating legal and binding terms of both settlements. The
representative union under provisions of BIR Act,1946 having sole
collective bargaining agent recognized by statutory provisions become
nugatory. The Apex Court in number of decisions has considered this
question reported in 2008 AIR SCW 8122. Therefore, according to my
opinion, even recent decision of Apex Court in case of Allahabad
Bank & Anr. is also not helpful to opponent No.2. On the
contrary, in case of waiving expressly or impliedly statutory right
under provisions of Payment of Gratuity Act by virtue of two
settlements arrived with representative union under provisions of BIR
At,1946, the opponent No.2 is not entitled to claim any amount of
difference under provisions of Payment of Gratuity Act,1972. Now to
challenge such calculation is contrary to both settlements as
referred above. Therefore, contentions raised by Mr.Danial, Trade
Union Representative cannot be accepted and hence, rejected.
17. In
view of aforesaid consent terms arrived between representative union
and Mills Co. and in case of dispute of difference in calculation,
the remedy is also available to opponent
No.2, but opponent No.2 is not entitled to approach directly to
controlling authority by filing necessary application under
provisions of Payment of Gratuity Act,1972. Unless and until the
order passed by this Court on 11.2.2008 recording consent terms
arrived between both parties is challenged to higher forum by either
of parties. The opponent No.2 after accepting consent terms and
tendering resignation and accepting amount without any objection, has
no right to straightway approach to controlling authority claiming
difference of amount under provisions of Payment of Gratuity Act,1972
because this consent terms is binding to him and he has no right to
even challenge such settlement which has been accepted by him arrived
by representative union under provisions of BIR Act,1946. This
consent terms is having binding effect not only the members of union
but, also to those workers even who are not members of such union.
The decision taken by representative union would be final and binding
and individual employee has no locus standi to file any proceedings
before the Court or any authority contrary to consent terms which
arrived between Mills Co. and representative union. That aspect has
been made clear by Apex Court in case of Shivanand Gaurishankar
Baswanti (supra). Therefore, controlling authority has no
jurisdiction to initiate any proceedings against present applicant in
response to application No.63 of 2009 filed by opponent No.2.
Therefore, considering relevant provisions of BIR Act and also the
observations made by Apex Court in above referred cases, the
proceedings filed by opponent No.2 before the controlling authority
under Payment of Gratuity Act,1972 in Application No.63 of 2009 is
also required to be quashed because it is contrary to consent terms
as recorded by this Court on 11.2.2008
and it is also contrary to law laid down by Apex Court as referred
above.
18. Therefore,
Application No.63 of 2009 filed by opponent No.2 before controlling
authority at Ahmedabad under the Payment of Gratuity Act,1972 is
hereby quashed and set aside. It is directed to controlling authority
at Ahmedabad under Payment of Gratuity Act,1972 not to initiate any
further proceedings in respect to Application No.63 of 2009 filed by
opponent No.2 against present applicant Mills Co. Accordingly, Rule
is made absolute to aforesaid extent with no order as to costs.
(H.K.RATHOD,J.)
(vipul)
Top