JUDGMENT
K.P. Sivasubramaniam, J.
1. This writ appeal is directed against the order of the learned single Judge dated August 31, 1998, in W.P.No. 7081 of (sic) Respondents 1 and 2 in the writ petition are the appellants in the above writ appeal.
2. The writ petition was filed by Dunlop
Factory Employees Union represented by its
General Secretary, for the issue of a writ of –
mandamus directing the first respondent-
company to pay to its workmen, who are the
members of petitioner-union, the wages and
salaries due from the month of November
1997, and to award costs. :
3. The undisputed fact which gave rise to the filing of the writ petition is that the first respondent/company had come to face financial crisis which resulted in its closure on February 9, 1998. Subsequent to the closure, the unit has also been declared as a sick industry and proposals by the B.I.F.R. have also been initiated, it is also not in dispute that the writ-petitioner/workmen had worked up to the date of the closure and they were not paid their wages due to them from the month of November 1997. Hence the petition by the employees’ union.
4. In the order of the learned single Judge the contentions raised on behalf of the petitioner were accepted and after over-ruling the objections by the respondents/appellants, the learned Judge issued directions to the appellant/management to pay a month’s wages and salaries to the members of the petitioner-union within a period of two months from the date of the order.
5. Sri R. Krishnamoorthy, learned senior counsel appearing for the appellants/ management contends as follows:
(i) An application having been made to the Government by the management for the issue of a certificate under Section 33-C of the Industrial Disputes Act, 1947, for the recovery of wages, the members of the petitioner-union cannot maintain the present writ petition under Article 226 of the Constitution of India and the fora under the Industrial Disputes Act have to be approached.
(ii) The financial position of the company was such that it was not possible for the company to pay the wages due to the respondents/workmen. They themselves have recognised the inability of the company to pay the amounts due to them by having themselves filed an earlier writ petition in W.P.No. 3266 of 1998 in which they had prayed for the issuance of a writ of mandamus to direct the Reserve Bank of India to remove the unofficial black listing of the company and to consider the company’s application for additional funds as a separate company in accordance with law;
6. Per contra, Sri N.G.R. Prasad, learned counsel appearing for the respondents/ workmen, would contend that the wages which have been earned by the labourers by having actually worked during the relevant period, it was the duty on the part of the management to pay the wages. It was also contended that even recently the company had issued a notice announcing a voluntary retirement scheme under which, it was notified that the employees who wish to retire from the services of the company voluntarily under the scheme, may submit their applications in the prescribed format to the management. Therefore, according to learned counsel for the respondents, contention of the company that they did not have sufficient funds, was not sustainable.
7. We have heard both sides and have also perused the detailed judgment rendered by the learned single Judge.
8. Number of judgments of the Supreme Court have been placed before us by learned counsel for the respondents emphasising that the wages due to the workers for the work which was actually and already done by them should be given priority and preference over the other outgoings and payments due by the company. Specific reference was made to the judgment of the Supreme Court reported in Workers of Rohtas Industries, Ltd. v Rohtas Industries, Ltd. 1987-II-LLJ-1 (SC). In the said case the Supreme Court was dealing with a case of claims by banks and other financial institutions who contended that the finished products lying in stock were pledged to them and the workers had claimed priority over the sale proceeds of the stocks. The Supreme Court held that notwithstanding that the stocks had been pledged with the bank and that the bank had priority in law still in view of the fact that the stocks were products of the industry before the closure, which was the result of the hard work of the workers, their rights to the wages have to be ranked above the right of the Bank. Consequently, the Supreme Court directed the official liquidator to pay the workers first after the sale of the stocks. Therefore, on an analysis of the judgments cited before us, we have to conclude that the claim of the workers for the work already done by them have to be given priority over the other claims and the company which had the benefit of the labour of the respondents/union cannot be heard to say that they were not in a position to pay the wages to the respondents/union.
9. It is true that Sri R. Krishnamoorthy, learned senior counsel countered the points raised by the respondents/union in the context of the scheme announced for voluntary retirement. Learned senior counsel also points out to several portions of the statements for revival filed before the B.I.F.R. to show that the said proposals were subject to raising funds from the banks for term loan to meet outflow on account of the voluntary retirement scheme. Therefore, according to him, the announcement for voluntary retirement scheme was dependent on the acceptance of the proposals for raising funds from the banks and that the announcement did not mean that the company had funds readily available with them.
10. It is true that the company is facing financial crisis and has been derived as sick industry. But every effort has to be made to pay the arrears of wages for the workmen, the company having derived the benefits out of their labour. It was also brought to our notice that the Writ Appeal No. 1216 of 1998 filed by the second respondent-union against this very order under appeal is dismissed by the Division Bench of this Court as premature.
11. In view of the admitted facts and also having regard to the circumstances under which the workers have approached this Court, we do not find any good reason to disagree with the directions given by the learned single Judge. More so, as against the claim of the respondent/union or the wages due for more than three months, namely, from November 1997 to February 9, 1998, the learned Judge has only ordered payment of wages due for only one month. Therefore, viewed from any angle, we are unable to interfere with the orders passed by the learned single Judge. However having regard to the submissions made by the company as regards the absence of any available fund as on date, we feel that in the interest of justice the time granted by the learned single Judge for the payment of wages can be extended further as follows:
There will be a direction directing the appellants to pay the members of the respondent/union the wages and salary for one month in two instalments. 50 per cent of the dues shall be paid within fifteen days from the date of the receipt of copy of this order, and the balance of 50 per cent shall be paid within a period of one month thereafter.
12. With the above observations, the writ appeal is dismissed. Consequently, connected C.M.P. is also dismissed. No costs.