IN THE HIGH COURT OF PUNJAB AND HARYANA
AT CHANDIGARH
Date of Decision : March 30, 2009.
C.W.P. NO. 17331 of 1999.
Punjab Spinning and Weaving Mills Limited, Bathinda. ...... Petitioner.
Versus.
Workman Sohan Lal and others. ...... Respondents.
C.W.P. NO. 8883 of 1999.
Punjab Spinning and Weaving Mills Limited, Bathinda. ...... Petitioner.
Versus.
Jawahar Lal and others. ...... Respondents.
C.W.P. NO. 10483 of 1999.
Punjab Spinning and Weaving Mills Limited, Bathinda. ...... Petitioner.
Versus.
Krishan Dev Charosia and others. ...... Respondents.
C.W.P. NO. 12848 of 1999.
Punjab Spinning and Weaving Mills Limited, Bathinda. ...... Petitioner.
Versus.
Sua Singh and others. ...... Respondents.
C.W.P. NO. 15420 of 1999.
Punjab Spinning and Weaving Mills Limited, Bathinda. ...... Petitioner.
Versus.
Shri Pal and others. ...... Respondents.
C.W.P. NO. 15466 of 1999.
Punjab Spinning and Weaving Mills Limited, Bathinda. ...... Petitioner.
Versus.
Nirmal Singh and others. ...... Respondents.
C.W.P. No. 17331 of 1999 and others. -2-
C.W.P. NO. 15544 of 1999.
Punjab Spinning and Weaving Mills Limited, Bathinda. ...... Petitioner.
Versus.
Workman Bachan Parsad and others. ...... Respondents.
C.W.P. NO. 16105 of 1999.
Punjab Spinning and Weaving Mills Limited, Bathinda. ...... Petitioner.
Versus.
Workman Gurdev Singh and others. ...... Respondents.
C.W.P. NO. 411 of 2000.
Punjab Spinning and Weaving Mills Limited, Bathinda. ...... Petitioner.
Versus.
Workman Sumer Shah and others. ...... Respondents.
C.W.P. NO. 16802 of 2000.
Punjab Spinning and Weaving Mills Limited, Bathinda. ...... Petitioner.
Versus.
Workman Mahi Pal and others. ...... Respondents.
C.W.P. NO. 16845 of 2000.
Punjab Spinning and Weaving Mills Limited, Bathinda. ...... Petitioner.
Versus.
Workman Sahdev Sahu and others. ...... Respondents.
CORAM:HON'BLE MR. JUSTICE AUGUSTINE GEORGE MASIH.
Present: Mr. Puneet Kansal, Advocate,
for the petitioner.
Mr. S.K. Sharma Budhladewala, Advocate,
for the respondent No. 1.
AUGUSTINE GEORGE MASIH, J.
By this order, I propose to decide C.W.P. Nos. 17331 of 1999,
8883 of 1999, 10483 of 1999, 12848 of 1999, 15420 of 1999,
C.W.P. No. 17331 of 1999 and others. -3-
15466 of 1999, 15544 of 1999, 16105 of 1999, 411 of 2000,
16802 of 2000, and 16845 of 2000. These writ petitions have been
preferred by the petitioner-management against its workmen wherein the
Labour Court has answered the references in their favour holding them
entitled to reinstatement in service with continuity thereof and full back
wages. In C.W.P. Nos. 17331 of 1999, 8883 of 1999, 10483 of 1999,
12848 of 1999, 15420 of 1999, 15544 of 1999, and 411 of 2000, the
petitioner-management had issued chargesheets to the workmen to which
the workmen had filed their replies but thereafter without holding any
inquiry, the services of the workmen were terminated. In C.W.P. Nos.
15466 of 1999, 16105 of 1999, 16802 of 2000 and 16845 of 2000, the
assertion of the petitioner-management was that the workmen had
abandoned their jobs and there was no termination of services of the
workmen by the petitioner-management.
As these writ petitions have been preferred by the petitioner-
management and the issues involved in these writ petitions are common,
therefore, they are being taken up together for final disposal as counsel for
the parties have submitted their arguments in two sets, namely, cases
relating to chargesheet and cases relating to abandonment.
Counsel for the petitioner-management who represents the
official liquidator submitted that the petitioner-management Punjab
Spinning and Weaving Mills Limited, was declared a Sick Industrial
Company within the meaning of Section 3(1)(o) of the Sick Industries
Companies (Special Provisions) Act, 1985. The Board of Industrial
Financial Re-construction (for short “the B.I.F.R.”) took proceedings under
Sections 16, 17, 18, and 19 of the Act and vide its order dated 24.04.1996
C.W.P. No. 17331 of 1999 and others. -4-
sanctioned a scheme for rehabilitation of the petitioner-company. The said
scheme was in the process of implementation when the present writ
petitions were preferred by the petitioner-company before this Court and in
view of Section 22 of the Sick Industrial Companies (Special Provisions)
Act, 1985, the impugned award to the extent of payment of back wages to
the workmen could not be executed. He, further, submits that thereafter on
the recommendations of the B.I.F.R., the petitioner-company was put into
liquidation. Company Petition No. 34 of 2001 came up for hearing before
this Court wherein winding up order dated 05.07.2001 was passed by this
Court. The official liquidator invited claims on 11.08.2005. 856 workmen
put forth their claims and there were three secured creditors (Banks) who
had also put forth their claims. Out of the total amount available i.e. Rs. 19
crores with the official liquidator, Rs. 13 crores as an interim measures
stands disbursed to the three secured creditors (Banks) and Rs. 6 crores is
still lying with the official liquidator which is available for disbursement.
On an application moved in the present writ petitions, the official liquidator
was impleaded as a party to these writ petitions.
After giving the latest position with regard to the petitioner-
company, counsel for the petitioner-company submits that in view of
Section 22 of the Sick Industries Company (Special Provisions) Act, 1985,
these writ petitions cannot be proceeded with any further. He contends that
as per Section 22 of the Sick Industries Company (Special Provisions) Act,
1985, no proceedings for execution, distress or the like against any of the
properties of the industrial company lies or could be proceeded further and
therefore, on this ground alone, the writ petitions deserve to be allowed.
He relies upon the judgment of the learned Single Judge in Cement
C.W.P. No. 17331 of 1999 and others. -5-
Corporation of India Versus Presiding Officer, Central Government
Industrial Tribunal-cum-Labour Court, 2002 (1) S.C.T. 355.
For consideration of this submission of counsel for the
petitioner-company, Section 22(1) of the Sick Industrial Companies
(Special Provisions) Act, 1985, needs to be referred to which reads as
follows :-
“Section 22(1).
Suspension of legal proceedings, contracts, etc.
(1) Where in respect of an industrial company, an inquiry
under Section 16 is pending or any scheme referred to under
Section 17 is under preparation or consideration or a
sanctioned scheme is under implementation or where an
appeal under Section 25 relating to an industrial company is
pending, then, notwithstanding anything contained in the
Companies Act, 1956 (1 of 1956), or any other law or the
memorandum and articles of association of the industrial
company or any other instrument having effect under the said
Act or other law, no proceedings for the winding up of the
industrial company or for execution, distress or the like
against any of the properties of the industrial company or for
the appointment of a receiver in respect thereof [and no suit
for the recovery of money or for the enforcement of any
security against the industrial company or of any guarantee in
respect of any loans or advance granted to the industrial
company] shall lie or be proceeded with further, except with
the consent of the Board or, as the case may be, the Appellate
Authority.”
A look at the heading of the Section itself clarifies the position
with regard to the ambit and operation of this Section. It says suspension
of legal proceedings, contracts etc. On further going through the text of
this Section, it is apparent that during the pendency of an inquiry under
C.W.P. No. 17331 of 1999 and others. -6-
Section 16 or when any scheme referred to under Section 17, is under
preparation or consideration or sanctioned scheme is under implementation
or wherein an appeal under Section 25 of the Sick Industrial Companies
(Special Provisions) Act, 1985 relating to an industrial company is pending
then the proceedings cannot be initiated as it would not lie or if the
proceedings are pending cannot be proceeded with further under any other
law except with the consent of the Board or the appellate authority as the
case may be. The effect, therefore, of this Section is the suspension of the
legal proceedings and the contracts etc. when the proceedings under Sick
Industrial Companies (Special Provisions) Act, 1985, is initiated or
pending under the provisions mentioned in Section 22 of the Sick
Industrial Companies (Special Provisions) Act, 1985.
The facts as submitted by counsel for the petitioner clearly
indicate that no such proceedings under the Sick Industrial Company
(Special Provisions) Act, 1985, is pending as of date as B.I.F.R. had
already recommended the winding up of the company in the year, 2001,
and as a matter of fact, in Company Petition No. 34 of 2001, winding up
orders have been passed by this High Court on 05.07.2001. Section 22 of
the Sick Industrial Companies (Special Provisions) Act, 1985, is no more
applicable and cannot be pressed into services by the petitioner-company to
stop the enforcement of the impugned awards passed against the petitioner-
company and in favour of the workmen. The judgment relied upon by
counsel for the petitioner-company i.e. Cement Corporation of India
(Supra), also deals with the situation where the order has been passed
against the petitioner-management and states that Section 22 of the Sick
Industrial Companies (Special Provisions) Act, 1985, has the effect of
C.W.P. No. 17331 of 1999 and others. -7-
suspending the proceedings with regard to the claims which relates to
recovery of money. The said cases relate to the proceedings initiated under
Section 33-C(2) of the Industrial Disputes Act. Therefore, in the light of
the present situation, this judgment has no effect. As a matter of fact
while issuing notices, this Court had only stayed the recovery of back
wages as the petitioner-company had clearly stated that they were ready
and willing to take back the workmen in service but because of the
company being declared as sick industry, the financial position was grim
and therefore, was unable to pay the back wages and also in the light of
Section 22 of the Sick Industrial Companies (Special Provisions) Act,
1985, the awards could not be enforced as far as the back wages were
concerned. That situation not being prevalent as of date, the legal bar with
regard to the enforcement and execution of the awards having been not in
existence, the awards could be adjudicated upon and given effect to
including with regard to the back wages. In this view of the matter, the
contention of counsel for the petitioner-company with regard to his
submission in the light of the provisions of Section 22 of the Sick
Industrial Company (Special Provisions) Act, 1985, cannot be accepted.
Faced with this situation, counsel for the petitioner-company
has now turned to the merits of the impugned award passed in cases
relating to the workmen who were chargesheeted and had submitted their
replies to the said chargesheets i.e. C.W.P. Nos. 17331 of 1999, 8883 of
1999, 10483 of 1999, 12848 of 1999, 15420 of 1999, 15544 of 1999, and
411 of 2000. He contends that the findings recorded by the Labour Court
cannot be sustained as it is the categoric stand of the petitioner-
management in its reply to the claim statement of the workmen that after
C.W.P. No. 17331 of 1999 and others. -8-
issuance of the chargesheets to the workmen and submission of the reply
by them, the petitioner-management decided to conduct inquiry. As the
situation was not conducive to the holding of an inquiry due to
deterioration of the situation, it was not possible for the petitioner-
management to conduct the inquiry as the workmen had committed grave
mis-conduct. These workmen had instigated their co-workers to resort the
production slow down and to sabotage the yarn in the process by cutting it
by sharp edged material and also tampered with the machines to cause huge
financial and production losses to the petitioner-company. Thereafter,
these workmen instigated their co-workers to go on illegal strike and
actively participated to ensure the strike. They abused and threatened the
loyal and willing workers with dire consequences if they performed duties
in the strike. Criminal proceedings were also initiated against these
workmen. In this situation, he submitted that the order passed by the
petitioner-management terminating the services of the workmen was fully
justified and in accordance with law. He further submits that the awards,
therefore, deserve to be set aside.
On the other hand, counsel for the respondents states that it is
not in dispute that no inquiry was held against the workmen and under
this situation, the petitioner-management was required to prove the charges
before the Labour Court to justify its order of termination. Having
produced no records, leading to the finding coming from the Labour Court
to the effect that the charges have not been proved against the workmen
due to lack of evidence, the assertions of the petitioner-management in
their response to the claim statement does not have any legs to stand on.
The findings, therefore, cannot be said to be perverse or due to non
C.W.P. No. 17331 of 1999 and others. -9-
consideration of the evidence produced by the petitioner-management
which would call for interference by this Court.
Perusal of the awards justify the contention raised by counsel
for the respondents. What has been proved by the petitioner-management
before the Labour Court is the chargesheets which were served upon the
workmen, thereafter, there is no evidence and material on records so as to
come to a conclusion or draw an inference that the workmen instigated
their co-workers to either resort to slow down production or to sabotage the
yarn or to tamper with machines nor has any evidence been produced that
they had instigated the co-workers to go on illegal strike or that they had
threatened, abused or forced the loyal and willing workers to participate in
the strike as alleged by the petitioner-management. Only management
witness Shri Bachittar Singh M.W.1 in his statement has not even alleged
about the charges against the workman. The onus being on the petitioner-
management to prove the charges levelled against the workmen either
during the domestic inquiry, which admittedly has not been held, or before
the Labour Court which the petitioner-management has desperately failed
in the absence of oral as well as documentary evidence with regard to the
charges levelled against the workmen, there can be no conclusion but the
one which has been arrived at by the Labout Court, vide its impugned
awards. No illegality, therefore, can be said to have been committed by the
Labour Court in the impugned awards with regard to the conclusion that
the order of dismissal passed against the workmen, cannot be held to be
either justified or in order. In view of the admitted fact that the workmen
had completed 240 days in the 12 proceeding months prior to their
termination and provisions of Section 25-F of the Industrial Disputes Act
C.W.P. No. 17331 of 1999 and others. -10-
having not been complied with, which fact is also admitted as no
compensation was paid to the workmen, the findings as recorded by the
Labour Court on this aspect cannot be faulted with.
Counsel for the petitioner with regard to C.W.P. Nos. 15466 of
1999, 16105 of 1999, 16802 of 2000 and 16845 of 2000, wherein the
assertion of the petitioner-management is that the workmen had abandoned
their jobs and were not terminated, he contends that the petitioner-
management had produced letters written by the petitioner-management
and sent under postal certificate to the workmen which were accepted
calling upon them to join duty. He, therefore, contends that this evidence
would clearly indicate that despite the petitioner-management having called
upon the workmen to join duty, they have failed to do the same which
would amount to abandonment, therefore, the provisions of Section 25-F of
the Industrial Disputes Act would not be attracted as there is no
termination of service of the workmen by the petitioner-management.
A perusal of the award would show that although the letters
have been produced by the petitioner-management as exhibits and is
alleged to have been sent under the postal certificate to the workmen but
the petitioner-management has failed to produce any postal receipts on the
records to prove the fact that these letters were actually posted. That being
the position, the assertion as put forth by the petitioner-management,
cannot be accepted as the onus of proving assertions which were made by
the petitioner-management was on it. Having not discharge that onus, the
petitioner-management cannot merely by producing certain letters claim
benefit thereof. The findings as recorded by the Labour Court being based
on correct interpretation of the evidence and law, cannot be interfered with.
C.W.P. No. 17331 of 1999 and others. -11-
Faced with this situation, counsel for the petitioner-
management contends that the back wages granted to the workmen by the
Labour Court are not justified as the onus to prove that the workmen were
not gainfully employed during the period for which back wages have been
claimed is on the workmen. He further contends that full back wages
cannot be allowed automatically or mechanically only because order of
termination is found to be unsustainable. While granting the relief with
regard to the back wages, the Labour Court was required to apply its mind
with regard to the financial position of the petitioner-company and also
with regard to the fact whether the onus which was heavily on the workman
to prove that he was gainfully employed have been discharged or not. For
this assertion, he relied upon the judgment of Hon’ble the Supreme Court
in the case of U.P. State Brassware Corporation Limited and another
Versus Uday Narain Pandey,2006(1) S.C.C. 479.
Counsel for the respondents submits that the workmen had so
pleaded before the Labour Court in their claim statements that they have
not been gainfully employed after the termination and have also stated
before the Labour Court in this regard. He, therefore, submits that onus
having been discharged, the relief granted by the Labour Court with regard
to back wages does not call for any interference by this Court.
I have given my thoughtful consideration to the submissions
made by counsel for the parties. The factual aspect with regard to the
petitioner-company having been declared sick industry and ultimately
leading to the winding up of the company, has not been disputed. It is also
not in dispute that after passing of the award, the award as a whole was not
stayed by this Court but only back wages were stayed that too taking into
C.W.P. No. 17331 of 1999 and others. -12-
consideration the financial constraints being faced by the petitioner-
company. Hon’ble the Supreme Court in U.P. State Brassware
Corporation Limited’s case (supra), has held that a person is not entitled
to get something only because it would be lawful to do so. The industrial
courts while adjudicating on disputes between the management and the
workmen must take into consideration the purpose, the law seeks to
achieve. The Industrial Disputes Act was principally enacted for the
purpose of pre-empting industrial tensions, providing mechanics of dispute
resolutions and setting up of necessary infrastructure so that the partners in
production may work together to create a climate of goodwill. Rendition of
justice would bring within its purview giving a person what is due to him
and not what can be given to him in the law. Earlier the payment of full
back wages on a declaration of the order of termination being invalid was
usual result, but now with the passage of time, a pragmatic view of the
matter is being taken by the Court realising that an industry may not be
compelled to pay the workman for the period during which he apparently
contributed little or nothing at all to it and/or for a period that was spent
unproductively as a result whereof the employer would be compelled to go
back to a situation which prevailed many years ago, namely, when the
workman was retrenched.
The changes brought about by the subsequent decisions of
Hon’ble the Supreme Court, therefore, emphasis upon doing the justice
between the parties. No precise formula can be laid down and it would not
be correct to contend that the payment of entire back wages should be
allowed automatically. It should not be granted mechanically and payment
of full back wages, cannot be a natural consequence. Keeping these
C.W.P. No. 17331 of 1999 and others. -13-
principles in mind and looking at the financial position of the petitioner-
company and the peculiar facts and circumstances of this case, it would be
just and equitable that the workmen be held entitled to 40 per cent of the
back wages in all the abovementioned writ petitions.
A direction is issued to release the back wages to the workmen
within a period of three months from the date of receipt of copy of this
order.
These writ petitions stand disposed of in the above terms.
(AUGUSTINE GEORGE MASIH)
JUDGE
March 30,2009.
sjks.
Whether referred to the Reporter – Yes.
C.W.P. No. 17331 of 1999 and others. -14-