SCA/13075/2007 9/ 9 JUDGMENT IN THE HIGH COURT OF GUJARAT AT AHMEDABAD SPECIAL CIVIL APPLICATION No. 13075 of 2007 For Approval and Signature: HONOURABLE MR.JUSTICE K.M.THAKER ========================================================= 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 ? ========================================================= ALANKAR CINEMA - Petitioner(s) Versus UMESHBHAI RAMANLAL DESAI & 1 - Respondent(s) ========================================================= Appearance : MR SP MAJMUDAR for Petitioner(s) : 1, NOTICE SERVED BY DS for Respondent(s) : 1, MR BHARAT SHAH for Respondent(s) : 1, UNSERVED-EXPIRED (N) for Respondent(s) : 2, ========================================================= CORAM : HONOURABLE MR.JUSTICE K.M.THAKER Date : 08/08/2008 ORAL JUDGMENT
Rule.
Mr. Bharat Shah, learned advocate for the respondent waives service
of Rule. With the consent of the learned advocates appearing for the
parties, the matter is taken up for final hearing today.
2. The
petitioner has approached this Court against an award dated 8.6.2006
passed by the Labour Court, Nadiad in Reference No. 150 of 1989 about
Respondent’s dispute against his termination. By the impugned
award, the Labour Court has directed the petitioner herein to
reinstate the respondent and pay him 25% of backwages.
3. The
relevant facts, as it transpires from the record of present petition,
are that the respondent workman was working in the establishment of
present petitioner since 1981 as Assistant Manager and at the
relevant time his salary was Rs. 400/-. The petitioner is running a
cinema theatre at Nadiad, District-Kheda. The respondent alleged
that his services were terminated illegally with effect from 30th
June, 1986 without complying the procedure prescribed by law.
Aggrieved by the said action of the petitioner, the respondent herein
initially issued the notice dated 24.10.1986. He also claimed that
subsequently he had issued notice on 21st June 1988. The
dispute raised by the petitioner could not be settled during
conciliation proceedings which appear to have been initiated after
respondent’s demand for reinstatement vide communication dated 6th
August, 1988. The order of Reference came to be made on 19th
December, 1988. The petitioner filed its reply ý against the
respondent’s claim statement – to the effect that it had purchased
the theatre by a Conveyance Deed executed in July 1987 and by virtue
of the terms and conditions of the said conveyance deed, it was
agreed between the parties to the agreement that all past
liabilities, including that of the employees, was of the erstwhile
owner of the theatre. On the basis of the said conveyance deed, the
petitioner prayed that it may not be saddled with any liability
towards the respondent if the action of the erstwhile owner of the
theatre was found to be illegal or unjustified. After hearing the
parties, the Labour Court came to the conclusion that the action of
respondent’s termination was illegal and that therefore the Court
directed the petitioner to reinstate the respondent. So far as the
issue of backwages is concerned, the Labour Court has observed that
it would not be justified to saddle the purchaser-petitioner with the
liability of the erstwhile owner, more particularly in view of the
time-gap between the alleged termination and the date of order of
reference or the date on which the respondent raised demand/dispute.
The Court also considered that it was not believable that during the
entire period in question the respondent might have remained wholly
unemployed during the long gap of 20 years. Considering such
aspects, the Labour Court directed the petitioner to pay 20% of
backwages. Aggrieved by the said direction, the petitioner has
preferred the present petition.
4. Mr.
SP Majmudar, learned advocate submitted that the petitioner
purchased the theatre in July 1987 and that therefore it is not
justified to hold the present petitioner liable for any action of the
erstwhile owner, more particularly when the petitioner purchased the
theatre with a clear understanding that all liabilities of the period
prior to the date of purchase would be that of the erstwhile owner.
He further submitted that in view of the fact that the action
impugned before the Labour Court was taken by the erstwhile owner of
the theatre, it was not justified for the learned Labour Court to
accept the submissions of the respondent workman without any
corroborating material to substantiate his claim that he was working
since 1981 and/or at the time of his alleged termination the
procedure prescribed by law was not complied with. Mr. Majmudar
further submitted that without prejudice to the contentions and with
a view to putting an end to this litigation the petitioner was ready
and willing to reinstate the respondent.
5. Mr.
Bharat Shah, appearing for the respondent, on the other hand,
submitted the respondent was illegally terminated with effect from
June 1986 and that therefore the learned Labour Court is justified in
concluding that there was breach of Section 25-F. He also submitted
that the Labour Court was also justified in holding that there was
breach of Section 25-G and Section 25-H. He submitted that the
respondent had served the notices dated 24.10.1986 and 21.6.1988,
however the respondent was not reinstated and that therefore the
award passed by the Labour Court is correct and justified. As
regards the direction for backwages, he submitted that the respondent
has remained unemployed and today also he is unemployed and the
petitioner could not establish that the respondent was gainfully
employed and that therefore the direction regarding backwages is also
justified.
6. From
the record, it transpires that the order of reference has been made
by the appropriate Government on 19th December, 1988. The
respondent appears to have claimed that he had served notice dated
24.10.1986, however, it is an undisputed fact that the petitioner
herein purchased the establishment in July 1987 and that therefore
the said notice could not have been served on present petitioner.
The respondent has also claimed that he had thereafter issued notice
dated 21.6.1988. Even if the said assertion of the respondent is to
be presumed as correct, then also there is time gap of almost 2 years
between the date of alleged termination of the notice dated
21.6.1988. It appears that it was two months thereafter that the
respondent made an application seeking reinstatement on 6th
August 1988 and the industrial dispute ultimately came to be
referred on 19.12.1988. Hence, there is a gap of almost 2 years
between the alleged date of termination and petitioner taking action
for raising an industrial dispute, which would suggest that the
respondent remained inactive for 2 years after his alleged
termination and did not take active step for raising dispute. In the
event of real and genuine unemployment the respondent would not have
remained so inactive and passive for almost 26 months in seeking
reinstatement. The aforesaid aspect is relevant for considering the
respondent’s claim for backwages.
7. In
view of the willingness expressed by the petitioner to reinstate the
respondent, the issues related to the direction granting
reinstatement are not required to be examined and that therefore this
Court has not gone into the said aspect.
8. The
only question which remains for consideration is about respondent’s
claim for backwages. The Labour Court has granted backwages at the
rate of 25%. On the fact that the petitioner raised dispute after a
gap of 2 years and on the fact that almost 20 years have passed-by
from the date of alleged termination till the date of the decision by
the Labour Court, the Labour Court appears to be justified in
proceeding on the premise that the respondent could not have remained
completely unemployed during the said period of 20 years.
Unfortunately, after addressing the aforesaid aspect, the Labour
Court failed to consider all relevant circumstances for determining
the claim for backwages. By now, in view of the judgment of the
Hon’ble Supreme Court, in General Manager, Haryana Roadways
V/s. Rudhan Singh reported in [2005(5) SCC 591] it is
clear that the direction for backwages is not an automatic
consequence of direction for reinstatement and while taking the
decision regarding backwages, the Labour Court should take all
relevant and attending facts and circumstances into consideration.
In present case, the Labour Court has failed to record any
satisfactory reason for awarding 25% of backwages. Differently put,
the Labour Court has failed to consider relevant aspects and record
its reasons and findings in respect of such relevant aspects which
ought to be addressed while deciding the issue of backwages and that
therefore this Court is not inclined to uphold the said direction
regarding backwages. The respondent has failed to explain the delay
in raising the dispute and has failed to give any explanation about
the means of maintaining himself and his family during past 20 years.
On overall consideration of the matter, this Court is of the view
that the Labour Court has not addressed the relevant aspects which
should have been considered for deciding the issue of backwages and
it has also not recorded any sustainable reason for awarding
backwages at the rate of 25% and that therefore the said directions
deserve to be set aside. Thus, so far as the direction regarding
reinstatement is concerned, the same is not disturbed and it is
confirmed in view of the statement on behalf of the petitioner. The
petitioner is directed to reinstate the respondent. So far as the
direction regarding backwages is concerned, the same is set aside.
However, it is clarified that the respondent shall be entitled for
continuity of service from the date of his original appointment,
i.e., from 1981.
9. With
the aforesaid clarifications and directions, the petition is disposed
of. Rule is made absolute to the aforesaid extent. No order as to
costs.
[
K.M. Thaker, J. ]
rmr.