{"id":199829,"date":"2005-01-25T00:00:00","date_gmt":"2005-01-24T18:30:00","guid":{"rendered":"https:\/\/www.legalindia.com\/judgments\/ms-maruti-udyog-ltd-vs-ram-lal-ors-on-25-january-2005"},"modified":"2017-09-04T13:40:28","modified_gmt":"2017-09-04T08:10:28","slug":"ms-maruti-udyog-ltd-vs-ram-lal-ors-on-25-january-2005","status":"publish","type":"post","link":"https:\/\/www.legalindia.com\/judgments\/ms-maruti-udyog-ltd-vs-ram-lal-ors-on-25-january-2005","title":{"rendered":"M\/S Maruti Udyog Ltd vs Ram Lal & Ors on 25 January, 2005"},"content":{"rendered":"
Supreme Court of India<\/div>\n
M\/S Maruti Udyog Ltd vs Ram Lal & Ors on 25 January, 2005<\/div>\n
Author: S.B. Sinha<\/div>\n
Bench: N. Santosh Hegde, S.B. Sinha<\/div>\n
           CASE NO.:\nAppeal (civil)  2846 of 2002\n\nPETITIONER:\nM\/s Maruti Udyog Ltd.\t\t\t\t\t\t\n\nRESPONDENT:\nRam Lal & Ors.\t\t\t\t\t\t\t\n\nDATE OF JUDGMENT: 25\/01\/2005\n\nBENCH:\nN. Santosh Hegde & S.B. Sinha\n\nJUDGMENT:\n<\/pre>\n
J U D G M E N T<\/p>\n
S.B. SINHA, J :\n<\/p>\n
\tMaruti Udyog Limited, the Appellant herein, is a Government
\ncompany within the meaning of Companies Act, 1956.  In terms of  a
\nnotification issued under Section 6 of the Maruti Limited (Acquisition and
\nTransfer of Undertakings) Act, 1980 (hereinafter referred to as ‘the said
\nAct’) the undertakings of the Maruti Limited (the Company) has vested in
\nthe Appellant.  It is aggrieved by and dissatisfied with the judgment and
\norder passed by a Division Bench of the Punjab and Haryana High Court in
\nLetters Patent Appeal No.837 of 1995 whereby and whereunder a judgment
\nand order passed by a learned Single Judge dated 19.4.1995 passed in
\nC.W.P. No.15728 of 1993 questioning an Award dated 28.7.1993 passed by
\nthe Labour Court in Reference Nos. 437, 438 and 166 of 1988, was set aside.\n<\/p>\n
BACKGROUND FACTS:\n<\/p>\n
 \tThe Respondents herein who are three in number were appointed by
\nMaruti Limited as Electrician, Helper and Assistant Fitter with effect from
\n27.4.1974, 8.11.1973 and 8.4.1974 respectively.  Their services stood
\nterminated by the said company on or about 25\/26.8.1977 as a result of
\nclosure of the factory.  The said company came to be wound up in terms of
\nan order dated 6.3.1978 passed by the High Court of Punjab and Haryana in
\nCompany Petition No.126 of 1977 titled Delhi Automobiles P. Ltd. vs.
\nMaruti Ltd. whereupon an Official Liquidator was appointed to take charge
\nof the assets thereof.  A formal winding up order was also drawn up in terms
\nof  Form No.52 of the Company (Court) Rules, 1959.  The company was
\nformally wound up on 6.3.1978 whereupon it ceased to have any business
\nactivity.  It is borne out from records that the learned Company Judge in the
\nsaid proceedings by an order dated 5.8.1977 directed the company that in
\nview of the fact that the industrial establishment of the company, namely,
\nMaruti Limited cannot continue with its production activity and the
\nworkmen employed therein cannot be given any job, all workmen should be
\nretrenched in accordance with the provisions of the Industrial Disputes Act,
\n1947 (hereinafter referred to as ‘the 1947 Act’).  Pursuant to or in
\nfurtherance of the said direction, a settlement was arrived at by and between
\nthe Official Liquidator and its employees, in terms whereof the employees
\nwee retrenched on or about 25\/26.8.1977 on payment of one month’s salary
\nin lieu of notice.  The employees agreed to forgo their right of three months’
\nnotice.  The termination took effect immediately upon signing of the
\nsettlement.\n<\/p>\n
The Parliament thereafter enacted the said Act for acquisition and
\ntransfer of undertakings of the Company which was preceded by an
\nOrdinance for Acquisition and Transfer of Undertakings of the said
\ncompany with effect from 13.10.1980, by reason whereof the assets of  the
\nsaid company vested in the Central Government. The Central Government,
\nhowever, on or about 24.4.1981 issued a notification in exercise of its power
\nconferred upon it under Section 6 thereof directing that its right, title and
\ninterest in relation to the undertakings of the company in stead and place of
\ncontinuing to vest in the Central Government shall vest in the Appellant
\nCompany.\n<\/p>\n
INDUSTRIAL DISPUTE:\n<\/p>\n
The erstwhile workmen of ‘the Company’ thereafter issued a notice of
\ndemand of reemployment upon the Appellant herein.  It is also not in dispute
\nthat M\/s R.K. Taneja and 72 others as workmen of the said establishment
\nfiled a writ petition before this Court, under Article 32 of the Constitution of
\nIndia, inter alia, for a declaration that Section 13 of  the said Act is
\nunconstitutional.  A direction was also sought for therein against the
\nAppellant herein to offer re-employment to the said petitioners.  The  said
\nwrit petition was dismissed in limine by an order dated 5.5.1983. The
\nRespondents herein, long thereafter raised an industrial dispute by serving
\ndemand notices seeking reemployment in the services of the Appellant
\npurported to be in terms of Section 25H of the 1947 Act.\n<\/p>\n
The State of  Haryana  in exercise of its power conferred upon it under
\nSection 10(1)(c) of the 1947 Act issued a notification on 25.8.1988 referring
\nthe following disputes for adjudication before the Labour Court :\n<\/p>\n
“(1) \tWhether Shri Ram Lal is entitled for
\nreemployment, if yes, with what details ?\n<\/p>\n
(2)  Whether Shri Ghinak Prasad is entitled for re-
\nemploymenbt,  if  yes, with what details, with what
\ndetails ?\n<\/p>\n
(3) \tWhether Shri Sampath Prasad is entitled for re-
\nemployment, if yes, with what details ?”\n<\/p>\n
In its Award dated 28.7.1993, the Labour Court upon holding that the
\nAppellant herein is the successor-in-interest of the said company opined that
\nit was liable to reemploy the Respondents with back-wages from the date of
\nsubmitting their respective demand notices.\n<\/p>\n
WRIT PROCEEDINGS:\n<\/p>\n
The Appellant herein filed a writ petition before the Punjab &
\nHaryana High Court questioning the said Award and the same was allowed
\nby a learned Single Judge of the said court by a judgment and order dated
\n19.4.1995 holding  :\n<\/p>\n
“(i) workmen-Respondents retrenched by the
\ncompany in August 1977 and did not challenge
\nretrenchment.  The company, thereafter, went into
\nliquidation and its undertakings came to vest in the
\nPetitioner under Acquisition Act, but liabilities of the
\ncompany were never taken over,.\n<\/p>\n
(ii) \tPetitioner cannot be said to be successor-in-
\ninterest of the company and become liable to offer
\nreemployment to the workmen in terms of Section 25H
\nof the Act.\n<\/p>\n
(iii)\tUnder Section 25H,  a workman can claim
\nreemployment after retrenchment  only from that
\nemployer who had retrenched him.  In the instant case,
\nthe workmen had never been in the employment of the
\nPetitioner nor did the Petitioner retrench  them.  They
\nwere in the employment of the company and it is the
\ncompany   which retrenched them in August 1977.  Thus,
\nthe claim for reemployment, if any, could be made
\nagainst the company only and not against the Petitioner.\n<\/p>\n
(iv)\tBy virtue of Section 13 of the Acquisition
\nAct, only persons who were in the service on the date of
\nthe take over, viz. 13.10.1980, could become the
\nemployees of the Petitioner and since, on admitted
\nposition, the Respondents were not employed in the
\nundertakings on the said date and had already been
\nretrenched in August 1977, they could, in no case,
\nbecome the employees of the Petitioner.\n<\/p>\n
(v)\tJudgment of this Hon’ble Court in the case
\nof Bharat Coking Coal Ltd., was distinguished on facts
\nsince in this case, the retrenchment of the workmen had
\nbecome final and they had never challenged the same as
\nin the other case.”\n<\/p>\n
\tAggrieved by and dissatisfied with the said judgment a Letters Patent
\nAppeal came to be filed by the Respondents herein, which by reason of the
\nimpugned judgment was allowed reversing the aforementioned findings of
\nthe learned Single Judge.\n<\/p>\n
 \tAggrieved, the Appellant is before us in this Appeal.\n<\/p>\n
SUBMISSIONS:\n<\/p>\n
 \tMr.Anil B. Divan, learned Senior Counsel appearing on behalf of the
\nAppellant,  had principally raised three contentions in support of the Appeal.
\nFirstly, it was argued that in view of the fact that from a perusal of the said
\nAct, it would appear that ‘the company’ was wound up in a proceeding for
\nliquidation and as the undertakings of the company had not been functioning
\nnecessitating the enactment thereof; the Division Bench of the High Court
\ncommitted a serious error in holding that the Appellant is the successor-in-
\ninterest of ‘the company’ and, therefore, liable to reemploy the Respondents
\nherein.  Secondly, it was urged that in any event as the closure of the
\nundertakings of  Maruti Limited is admitted and having regard to the fact
\nthat the Respondents herein had been paid the requisite amount of
\ncompensation in terms of Section 25FFF of the 1947 Act,  Section 25H
\nthereof will have no application having regard to the definition of
\n‘retrenchment’ contained in Section 2(oo) thereof.\n<\/p>\n
\tDrawing our attention to the provisions of the said Act and in
\nparticular Section 3, 4, 5, 13 and 25 thereof, the learned counsel would,
\nlastly, contend that the Act being a self-contained Code in terms whereof the
\nliability of the company had not been taken over and as the same contains a
\nnon-obstante clause, the provisions thereof would prevail over the 1947 Act.\n<\/p>\n
\tMr. Anupal Lal Das, learned counsel appearing on behalf of the
\nRespondents, on the other hand, would contend that in view of the decision
\nof this Court in Anakaplla Co-operative Agricultural and Industrial Society
\nLimited vs. Workmen<\/a> [(1963) Supp. 1 SCR 730], the Appellant is the
\nsuccessor-in-interest of the business of the said company.  The learned
\ncounsel would submit that the concurrent findings of fact having been
\narrived at in this regard by the Labour Court as well as the Division Bench
\nof the High Court, this court should not interfere therewith.\n<\/p>\n
\tPlacing reliance on the decision of this Court in Workmen represented
\nby Akhil Bhartiya Koyla Kamgar Union vs. Employers<\/a> in relation to the
\nManagement of Industry Colliery of Bharat Coking Coal Ltd. and Others.
\n[(2001) 4 SCC 55], Mr. Das would argue that reemployment of the workmen
\nin terms of the provisions of the 1947 Act being not a liability under the said
\nAct and furthermore with a view to give effect to Section 13 thereof, the
\ntermination of the employment of the Respondents by the company should
\nbe held to be a retrenchment within the meaning of Section 25F of the 1947
\nAct.  Alternatively, it was submitted that in view of the fact that the term
\n‘workmen’ is used in Section 25F,  25FF and 25FFF of the 1947 Act would
\ninclude a retrenched workman, Section 25H should be held to be applicable
\nhaving regrard to the non-obstante clause contained in Section 25J thereof.\n<\/p>\n
DISCUSSIONS:\n<\/p>\n
\tThe basic fact of the matter, as noticed hereinbefore, is not in dispute.
\nIt is also not in dispute that although the services of the three Respondents
\nwere terminated by the company as a result of the closure of the factory, the
\nformal retrenchment came into being in terms of the order of the learned
\nCompany Judge.  It is furthermore not in dispute that a settlement had been
\narrived at by and between the Official Liquidator and the workmen as regard
\nthe amount of compensation payable to the workmen of the said company.\n<\/p>\n
\tThe closure of the undertakings of the company, thus, stands
\nadmitted.  It also finds mention in the Award passed by the Labour Court.  In
\nthe aforementioned factual backdrop, we may notice the salient feature of
\nthe said Act.\n<\/p>\n
THE SAID ACT:\n<\/p>\n
 \tThe said Act was enacted having regard to the liquidation proceeding
\npending in the High Court of Punjab and Haryana following an order of
\nwinding up of the said company, inter alia, for utilization of the production
\nfacilities and equipment thereof as the company had not been functioning.
\nIn terms of Section 3 of the said Act, the right, title and interest of the
\ncompany in relation to its undertakings vested in the Central Government.
\nGeneral effect of such vesting is contained in Section 4 thereof; Sub-sections
\n(2) and (4) whereof reads as under :\n<\/p>\n
\t“(2)\tAll properties as aforesaid  which have
\nvested in the Central Government under  section 3 shall,
\nby force of such vesting, be freed and discharged from
\nany trust, obligation, mortgage charge, lien and all other
\nincumbrances affecting them, and any attachment,
\ninjunction, decree or order of any Court restraining the
\nuse of such properties in any manner shall be deemed to
\nhave been withdrawn.\n<\/p>\n
\t(4)\tFor the removal of doubts, it is hereby
\ndeclared that the mortgagee of any property referred to in
\nsub-section (3) or any other person holding any charge,
\nlien or other interest in, or in relation to, any such
\nproperty shall be entitled to claim, in accordance with his
\nrights and interests, payment of the mortgage money or
\nother dues, in whole or in part, out of the amount
\nspecified in section 7, but no such mortgage, charge, lien
\nor other interest shall be enforceable against any property
\nwhich has vested in the Central Government.”\n<\/p>\n
\tSection 5 provides that the Central Government or the Government
\ncompany, as the case may be, shall not be liable for prior liabilities of the
\nsaid company.  Section 6 envisages vesting of the undertakings in a
\nGovernment company if a notification in this behalf is issued by the Central
\nGovernment.  Chapter IV of the said Act provides for management of the
\nundertakings of the company.  Chapter V provides for provisions relating to
\nthe employees of the company.  Section 13 which is relevant for our purpose
\nreads as under :\n<\/p>\n
\t“13. Employment of certain employees to
\ncontinue.- (1) Every person who has been, immediately
\nbefore the appointed day, employed in any of the
\nundertakings of the Company shall become, –\n<\/p>\n
(a) \ton and from the appointed day an employee
\nof the Central Government; and<\/p>\n
(b) \twhere the undertakings of the Company are
\ndirected under sub-section (1) of section 6 to
\nvest in a Government company, an
\nemployee of such Government company on
\nand from the date of such vesting,<\/p>\n
and shall hold office or service under the Central
\nGovernment or the Government company, as the case
\nmay be, with the same rights and privileges as to pension,
\ngratuity and other matters as would have been admissible
\nto him if there had been no such vesting  and shall
\ncontinue to do so unless and until his employment under
\nthe Central Government or the Government company, as
\nthe case may be, is duly terminated or until his
\nremuneration and other conditions of service are duly
\naltered by the Central Government or the Government
\ncompany, as the case may be.\n<\/p>\n
(2)\tNotwithstanding anything contained in the
\nIndustrial Disputes Act, 1947, or in any other law for the
\ntime being in force, the transfer of the services of any
\nofficer or other person employed in any undertaking of
\nthe Company to the Central Government or the
\nGovernment company shall not entitle such officer or
\nother employee to any compensation under this Act or
\nentitle such officer or other employee to any
\ncompensation under this Act or under any other law for
\nthe time being in force and no such claim shall be
\nentertained by any Court, tribunal or other authority.\n<\/p>\n
        (3)\tWhere, under the terms of any contract of
\nservice  or otherwise, any person, whose services become
\ntransferred to the Central Government or the Government
\ncompany by reason of the provisions of this Act, is
\nentitled to any arrears of salary or wages or any payments
\nfor any leave not availed of or any other payment, not
\nbeing payment by way of gratuity or pension, such
\nperson may enforce his claim against the Company, but
\nnot against the Central Government or the Government
\ncompany.”\n<\/p>\n
\t\t\t\t\t(emphasis supplied)<\/p>\n
\tChapter VI provides for appointment of the Commissioner of
\nPayments for the purpose disbursing the amounts payable to the company
\nunder Sections 7 and 8 of the said Act and the procedure laid down therein.
\nSection 25 contains a non-obstante clause  stating that the provisions of the
\nsaid Act shall have effect notwithstanding anything inconsistent therewith
\ncontained in any other law for the time being in force or in any instrument
\nhaving effect by virtue of any law, other than the said Act, or in any decree
\nor order of any Court, tribunal or other authority.\n<\/p>\n
APPLICATION OF THE ACT:\n<\/p>\n
\tThe Respondents could have claimed a legal right of employment  in
\nthe Appellant provided they were employed in any of the undertakings of the
\ncompany immediately before the appointed day.  Section 13 of the Act
\npostulates a situation where a workman would continue to be a workman
\ndespite the statutory transfer.  A workman, who has ceased to be in
\nemployment of the Company before the appointed day, therefore, would not
\nbe entitled to the benefit thereof.  The order of winding up, as noticed
\nhereinbefore,  was passed by the High Court of Punjab and Haryana by order
\ndated 6.3.1978 and a direction for terminating the services of all the
\nworkmen had also been issued by the learned Company Judge on  5.8.1977,
\npursuant whereto and in furtherance whereof , a settlement was arrived at by
\nand between the Official Liquidator and the workmen.\n<\/p>\n
\tSuch settlement was arrived at indisputably having regard to the
\nprovisions contained in Section 25FFF of the 1947 Act.  Section 25F
\nprovides for entitlement of compensation to a workman who has been in
\ncontinuous service for not less than one year and who is  retrenched by the
\nemployer, until the workman has been given one month’s notice in writing
\nindicating the reasons for retrenchment or the workman has been paid  one
\nmonth’s wages  in lieu thereof as well as compensation, the amount whereof
\nshall be equivalent to fifteen days’ average pay for every completed year of
\nservice or any part thereof in excess of six months; and a notice in the
\nprescribed manner is served on the appropriate Government.  Section 25FF
\nenvisages payments of compensation to a workman in case of transfer of
\nundertakings, the quantum whereof is to be determined in accordance with
\nthe provisions contained in Section 25F, as if the workman had been
\nretrenched. A similar provision for payment of compensation to a workman
\nin case of closure of an undertaking is in Section 25FFF of the 1947 Act in
\nterms whereof also the concerned workman would be entitled to notice and
\ncompensation in accordance with the provisions of Section 25F, as if he had
\nbeen retrenched.\n<\/p>\n
\tHow far and to what extent the provisions of Section 25F of the 1947
\nAct would apply in case of transfer of undertaking or closure thereof is the
\nquestion involved in this appeal.  A plain reading of the provisions contained
\nin Section 25FF and Section 25FFF of the 1947 Act leaves no manner of
\ndoubt that Section 25F thereof is to apply only for the purpose of
\ncomputation of compensation and for no other.  The expression “as if” used
\nin Section 25FF and Section 25FFF of the 1947 Act is of great significance.
\nThe said term merely envisages computation of compensation in terms of
\nSection 25F of the 1947 Act and not the other consequences flowing
\ntherefrom.  Both Section 25FF and Section 25FFF provide for payment of
\ncompensation only, in case of transfer or closure of the undertaking.  Once a
\nvalid transfer or a valid closure comes into effect, the relationship of
\nemployer and employee takes effect.  Compensation is required to be paid to
\nthe workman as a consequence thereof and for no other purpose.\n<\/p>\n
\tA Constitution Bench of this Court in Hariprasad Shivshankar Shukla
\nvs. A.D. Divikar<\/a> [(1957) SCR 121]  interpreted the word ‘retrenchment’ as
\ncontained in Section 2(oo) of the ID Act, holding :\n<\/p>\n
\t“For the reasons given above, we hold, contrary to
\nthe view expressed by the Bombay High Court, that
\nretrenchment as defined in s.2 (oo) and as used in s.25F
\nhas no wider meaning than the ordinary, accepted
\nconnotation of the word : it means the discharge of
\nsurplus labour or staff by the employer for any reason
\nwhatsoever, otherwise than as  punishment inflicted by
\nway of disciplinary action, and it has no application
\nwhere the services of all workmen have been terminated
\nby the employer on a real and bona fide closure of
\nbusiness as in the case of Shri Dinesh Mills Ltd. or where
\nthe services of all workmen have been terminated by the
\nemployer on the business or undertaking being taken
\nover by another employer in circumstances like those of
\nthe Railway Company.”\n<\/p>\n
\tThe history of the legislation has been noticed by a Constitution
\nBench of this Court in Anakapalla Co-operative Agricultural and Industrial
\nSociety Ltd. (supra) and it, while holding that a company taking over the
\nmanagement of a closed undertaking may in a given situation become
\nsuccessor-in-interest but as regard the interpretation of the relevant
\nprovisions of the 1947 Act following Hariprasad Shivshankar Shukla
\n(supra), opined :\n<\/p>\n
“The Legislature, however,  wanted to provide that
\nthough such termination may not be retrenchment
\ntechnically so-called, as decided by this Court,
\nnevertheless the employees in question whose services
\nare terminated by the transfer of the undertaking  should
\nbe entitled to compensation, and so, s. 25FF provides that
\non such termination compensation would be paid to them
\nas if the said termination was retrenchment.  The words
\n“as if” bring out the legal distinction between
\nretrenchment defined by s. 2(oo) as it was interpreted by
\nthis Court and termination of services consequent upon
\ntransfer with which it deals.  In other words, the section
\nprovides that though  termination of services on transfer
\nmay not be  retrenchment, the workmen concerned are
\nentitled to compensation as if the said termination was
\nretrenchment.  This provision has been made for the
\npurpose  of calculating the amount of compensation
\npayable to such workmen; rather than provide for the
\nmeasure of compensation over again, s. 25FF makes a
\nreference to s. 25F for that limited purpose, and,
\ntherefore, in all cases to which s.25FF applies, the only
\nclaim which the employees of the transferred concern can
\nlegitimately make is a claim for compensation against
\ntheir employers.  No claim can be made against the
\ntransferee of the said concern.”\n<\/p>\n
The said decision, therefore, is an authority for the proposition that the
\nexpression ‘as if’ has limited application and has been employed only for the
\npurpose of computation of quantum of compensation and takes within its
\npurview a case where retrenchment as contained in Section 2(oo) of the
\n1947 Act has taken place within the meaning of Section 25F and not in a
\ncase falling under Sections 25FF or 25FFF thereof.\n<\/p>\n
Once it is held that Section 25F will have no application in a case of
\ntransfer of an undertaking or closure thereof as contemplated in Section 25F
\nand 25FFF of the 1947 Act, the logical corollary would be that in such an
\nevent Section 25H will have no application.\n<\/p>\n
The aforementioned provisions clearly carve out a distinction that
\nalthough identical amount of compensation would be required to be paid in
\nall situations but the consequence following retrenchment under Section 25F
\nof the 1947 Act would not extend further so as to envisage the benefit
\nconferred upon a workman in a case falling under Sections 25FF or 25FFF
\nthereof.  The distinction is obvious inasmuch as whereas in the case of
\nretrenchment simpliciter a person looses his job as he became surplus and,
\nthus, in the case of revival of chance of employment, is given the preference
\nin case new persons are proposed to be employed by the said undertaking;
\nbut in a case of transfer or closure of the undertaking the workman
\nconcerned is entitled to receive compensation only.  It does not postulate a
\nsituation where a workman despite having received the amount of
\ncompensation would again have to be offered a job by a person reviving the
\nindustry <\/p>\n
Applicability of Section 25H of the 1947 Act in the case of closure of
\nan undertaking came up also for consideration before this Court in Punjab
\nLand Development and Reclamation Corporation Ltd., Chandigarh etc. vs.
\nPresiding Officer, Labour Court, Chandigarh and Others etc.  [(1990) 3 SCC
\n682], wherein a Constitution Bench in no uncertain terms held :\n<\/p>\n
“Very briefly stated Section 25FFF which has been
\nalready discussed lays  that “where an undertaking is
\nclosed down for any reason whatsoever, every workman
\nwho has been in continuous service for not less than one
\nyear in that undertaking  immediately before such closure
\nshall, subject to the provisions of sub-section (2), be
\nentitled to notice and compensation in accordance with
\nthe provisions of Section 25F, as if the workman had
\nbeen retrenched” (emphasis supplied).  Section 25H
\nprovides for reemployment of retrenched workmen.  In
\nbrief, it provides that where any workmen are retrenched,
\nand the employer proposes to take into his employment
\nany person, he shall give an opportunity to the retrenched
\nworkmen to offer themselves for re-employment as
\nprovided in the section subject to the conditions as set out
\nin the section.  In our view, the principle  of harmonious
\nconstruction implies that in a case where there is a
\ngenuine  transfer of an undertaking or genuine closure of
\nan undertaking as contemplated in the aforesaid sections,
\nit would be inconsistent to read into the provisions a right
\ngiven to workman “deemed to be retrenched”  a right to
\nclaim reemployment as provided in Section 25H.  In such
\ncases, as specifically provided in the relevant sections the
\nworkmen concerned would only be entitled to notice and
\ncompensation in accordance with Section 25F.  It is
\nsignificant that in a case of transfer of an undertaking or
\nclosure of an undertaking in accordance with the
\naforesaid  provisions, the benefit specifically given to the
\nworkmen is “as if the workmen had been retrenched”
\nand this benefit is restricted to notice and compensation
\nin accordance with the provisions of Section 25F.”\n<\/p>\n
\t\t\t\t\t \t(Emphasis supplied)<\/p>\n
The said dicta was reiterated by a Bench of this Court in H.P. Mineral
\n& Industrial Development Corporation Employees’ Union vs. State of H.P.
\nand Others<\/a> [(1996) 7 SCC 139], stating :\n<\/p>\n
“Since Section 25-( O) was not available  on account
\nof the said provision having been struck down by this
\nCourt the only protection that was available to the
\nworkmen whose services were terminated as a result of
\nclosure was that contained in Sections 25-FFA and 25-
\nFFF of the Act.  It is not disputed that both these
\nprovisions have been complied with in the present case.”\n<\/p>\n
DECISIONS RELIED UPON BY THE HIGH COURT:\n<\/p>\n
The Division Bench of the High Court, however, proceeded on the
\nbasis that the case of the Respondents herein is covered by the two decisions
\nof this Court, namely,  The Workmen vs. The Bharat Coking Coal Ltd. &
\nOthers<\/a> [AIR 1978 SC 979 : (1978) 2 SCC 175]  and  Workmen represented
\nby Akhil Bhartiy Koyla Kamgar Union (supra) rendered on interpretation of
\nprovisions of Section 17 of  the Coking Coal Mines (Nationalization) Act,
\n1972 (hereinafter referred to as ‘the 1972 Act’) .  It is no doubt true that the
\nprovisions of Section 17 of the 1972 Act and Section 13 of the said Act are
\nin pari materia but before we proceed to deal with the said decisions, we
\nmay indicate that whereas in the present case, the said Act came into effect
\non 27.12.1980,   the winding up order was passed on 6.3.1978 as a result
\nwhereof  there had been no continuity of the business activity of the
\nundertakings of the said company.  The expression ‘immediately before the
\nappointed day’ contained in Section 13 of the said Act vis-`-vis Section 17
\nof the 1972 Act is of some importance.   The coking coal mines which stood
\nnationalized by reason of the 1972 Act were running concerns whereas
\nadmittedly the undertaking of the company had not been functioning and the
\nenactment became necessary only having regard thereto and for the purpose
\nof  utilization of production facilities and the equipment thereof.\n<\/p>\n
In  Bharat Coking Coal Ltd. (supra), a distinction was made between a
\nliability of the Central Government vis-`-vis the Government company as
\ncontained in Section 9 and Section 17 of the 1972 Act holding that the
\nliabilities of the owner, agent, manager, or managing contractor, as the case
\nmay be, are liabilities which are referable to sub-section (2) thereof;
\nwhereas Section 17 contains a special provision relating to workmen and
\ntheir continuance in service notwithstanding the transfer from private
\nownership to the Central Government or the Government company, as the
\ncase may be.  The court holding that the said provision confers a statutory
\nprotection for the workmen and is express, explicit and mandatory and
\nreferring to the definition of ‘workman’ as contained in Section 2(s) of the
\n1947  Act, opined that even a workman who had been dismissed from his
\nservice and  directed to be reinstated by an award of industrial adjudicator
\nwould come within the purview thereof.  The said decision was rendered in
\nthe fact situation obtaining therein as the services of the concerned workmen
\ntherein were terminated by the erstwhile management of  the New
\nDharmaband Colliery in October, 1969, whereupon an industrial dispute was
\nraised followed by a reference in October, 1970 and during the pendency
\nthereof, the  Colliery was nationalized with effect from 1.5.1972.  The
\nquestion which, therefore, came up for consideration before this Court was
\nas to whether an award of reinstatement can be enforced against the Bharat
\nCoking Coal Ltd., a Government company, in whose favour a notification of
\nvesting of the said Colliery was issued by the Central Government having
\nregard to the provisions contained in Section 9 vis-`-vis Section 17 thereof.
\nAn award of reinstatement postulates continuity of service, and the same
\ncould be enforced against the company in which the undertakings vested in
\nterms of the provisions of a Parliamentary Act.  The said decision, therefore,
\ncannot be said to have any application in the fact of the present case.\n<\/p>\n
In Workmen represented by Akhil Bhartiya Koyla Kamgar Union
\n(supra), the concerned workmen were retrenched by the management of
\nIndustry Colliery of Bharat Coking Coal Ltd. on 9.6.1971 owing to
\noperational and financial problems and later on the management was taken
\nover by the Central Government under the Coking Coal Mines (Emergency
\nProvisions) Act, 1971 followed by the Coking Coal Mines (Nationalisation)
\nAct, 1972.  Before the said Bench, the decision in Anakapalla Cooperative
\nAgricultural and Industrial Society Ltd. (supra) was referred to but was
\ndistinguished on the ground that whereas in Anakapalla Cooperative
\nAgricultural and Industrial Society Ltd. (supra) the provision of Section
\n25FF was attracted,  therein the provision of Section 25F was attracted,
\nstating :\n<\/p>\n
\t“9.  Shri Sinha submitted that as soon as transfer
\nhad been effected under Section 25FF of the Act all the
\nemployees became entitled to claim compensation and
\nthus those who had been paid such compensation will not
\nbe entitled to claim reemployment under Section 25-H of
\nthe Act as the same would result in double benefit in the
\nform of payment of compensation and immediate re-
\nemployment and, therefore, fair justice means that such
\nworkmen will not be entitled to such conferment of
\ndouble benefit.  It is no doubt true that this argument
\nsounds good, but there has been no retrenchment as
\ncontemplated under Section 25-FF of the Act in the
\npresent case.  The workmen in question have been
\nretrenched  long before the Colliery was taken over the
\nrespondents and, therefore, the principles stated in
\nAnakapalle Coop. Agricultural and Industrial Society
\nLtd. (AIR 1963 SC 1489) in this regard cannot be applied
\nat all.  The workmen had been paid compensation only
\nunder Section 25-F and not under Section 25-FF of the
\nAct on transfer of the Colliery to the present
\nmanagement.  That case has not been pleaded or
\nestablished.  Hence, we do not think that the line upon
\nwhich the High Court has proceeded is correct.  The
\norder made by the High Court deserves to be set aside
\nand the award made by the Tribunal will have to be
\nrestored.”\n<\/p>\n
The said decision, therefore, in stead of advancing the case of the
\nRespondents runs counter thereto inasmuch as in the said decision it has
\nbeen categorically held that Section 25H would come into play only when a
\nretrenchment in terms of Section 25F was made but the said provision would
\nnot come into play in a case attracting Section 25FF of the 1947 Act.
\nUnfortunately, before the said Bench of this Court even the amended
\nprovisions of Section 17 of the 1972 Act were not brought to its notice.\n<\/p>\n
THE 1947 ACT:\n<\/p>\n
We have noticed hereinbefore that the consequences other than
\npayment of compensation envisaged in Section 25F of the Act do not flow in
\ncase of transfer or closure of the undertaking.  Section 25H of the 1947 Act
\ncannot, thus, be invoked in favour of the Respondents in view of the fact that
\nthey were not in the employment of the company on the appointed day i.e.
\non 13.10.1980.\n<\/p>\n
The submission of Mr. Das to the effect that the Parliament having
\nused the words ‘every workman’ in Section 25FFF, which would include
\ndismissed workmen in view of its definition contained in Section 2(s) of the
\n1947 Act, should be widely interpreted so as to hold that even those
\nworkmen who had received compensation would be entitled to the benefit of
\nSection 25H of the 1947 Act, cannot be accepted.    Such a construction is
\nnot possible keeping in view the statutory scheme of the 1947 Act.  Section
\n25F vis-`-vis Section 25B read with Section 2(oo) of the 1947 Act
\ncontemplates a situation where a workman is retrenched from services who
\nhad worked for a period of not less than one year on the one hand and those
\nworkmen who are covered by Section 25FF and Section 25FFF on the other
\nkeeping in view the fact that whereas in the case of the former, a
\nretrenchment takes place, in the latter it does not.  The Parliament amended
\nthe provisions of the 1947 Act by inserting Section 25FF and Section 25FFF
\ntherein by reason of  the Industrial Disputes (Amendment Act), 1957 with
\neffect from 28.11.1956, as it was found that having regard to the helpless
\ncondition to which workman would be thrown if  his services are terminated
\nwithout payment of compensation and presumably on the ground that if a
\nreasonable compensation is awarded, he may be able to find out an
\nalternative employment within a reasonable time.  In the  case of closure of
\nan industrial undertaking the Act contemplates payment of compensation
\nalone.\n<\/p>\n
In construing a legal fiction the purpose for which it is created should
\nbe kept in mind and should not be extended beyond the scope thereof or
\nbeyond the language by which it is created.  Furthermore, it is well-known
\nthat a deeming provision cannot be pushed too far so as to result in an
\nanomalous or absurd position.  The Court must remind itself that the
\nexpressions like “as if” is adopted in law for a limited purpose and there
\ncannot be any justification to extend the same beyond the purpose for which
\nthe legislature adopted it.\n<\/p>\n
\tIn a recent decision, the Constitution Bench of this Court in P.
\nPrabhakaran Vs. P. Jayarajan [JT 2005 (1) SC 173] opined:\n<\/p>\n
“A legal fiction pre-supposes the existence of the
\nstate of facts which may not exist and then works
\nout the consequences which flow from that state of
\nfacts.  Such consequences have got to be worked
\nout only to their logical extent having due regard
\nto the purpose for which the legal fiction has been
\ncreated.  Stretching the consequences beyond what
\nlogically flows amounts to an illegitimate
\nextension of the purpose of the legal fiction.”\n<\/p>\n
Furthermore, in a situation of this nature, the rule of purposive
\nconstruction should be applied.\n<\/p>\n
The statutory scheme does not envisage that even in the case of
\nclosure of an undertaking, a workman who although had not been retrenched
\nwould be reemployed in case of revival thereof by another company.  If the
\nsubmission of Mr. Das is accepted, the same would not only run contrary to
\nthe statutory scheme but would make the definition of retrenchment
\ncontained in Section 2(oo) of the 1947 Act otiose.\n<\/p>\n
The interpretation of Section 25J of the 1947 Act as propounded by
\nMr. Das also cannot also be accepted inasmuch as in terms thereof only the
\nprovisions of the said Chapter shall have effect notwithstanding anything
\ninconsistent therewith contained in any other law including the Standing
\nOrders made under the Industrial Employment (Standing Orders) Act, but it
\nwill have no application in a case where something different is envisaged in
\nterms of the Statutory Scheme.  A beneficial statute, as is well known, may
\nreceive liberal construction but the same cannot be extended beyond the
\nstatutory scheme.  [See Deepal Girishbhai Soni and Others Vs. United India
\nInsurance Co. Ltd. Baroda, (2004) 5 SCC 385].\n<\/p>\n
In the instant case, we are not concerned with the liability of the
\nerstwhile company.  It stands accepted that the Appellant has no monetary
\nliability as regard the amount of compensation payable to the workmen in
\nview of Section 5 of the said Act.\n<\/p>\n
NON-OBSTANTE CLAUSE  EFFECT OF:\n<\/p>\n
The said Act contains a non-obstante clause.  It is well-settled that
\nwhen both statutes containing non-obstante clauses are special statutes, an
\nendeavour should be made to give effect to both of them.  In case of conflict,
\nthe latter shall prevail.\n<\/p>\n
In Solidaire India Ltd. Vs. Fairgrowth Financial Services Ltd. and
\nOthers [(2001) 3 SCC 71], it is stated:\n<\/p>\n
“9. It is clear that both these Acts are special Acts.
\nThis Court has laid down in no uncertain terms
\nthat in such an event it is the later Act which must
\nprevail.  The decisions cited in the above context
\nare as follows: Maharashtra Tubes Ltd. v. State
\nIndustrial & Investment Corpn. of Maharashtra
\nLtd., Sarwan Singh<\/a> v. Kasturi Lal; Allahabad Bank
\nv. Canara Bank and Ram Narain<\/a> v. Simla Banking
\n& Industrial Co. Ltd.\n<\/p>\n
10. We may notice that the Special Court had in
\nanother case dealt with a similar contention.  In
\nBhoruka Steel Ltd. v. Fairgrowth Financial
\nServices Ltd. it had been contended that recovery
\nproceedings under the Special Court Act should be
\nstayed in view of the provisions of the 1985 Act.
\nRejecting this contention, the Special Court had
\ncome to the conclusion that the Special Court Act
\nbeing a later enactment would prevail.  The
\nheadnote which brings out succinctly the ratio of
\nthe said decision is as follows:\n<\/p>\n
“Where there are two special statutes which
\ncontain non obstante clauses the later statute shall
\nprevail.  This is because at the time of enactment
\nof the later statute, the Legislature was aware of
\nthe earlier legislation and its non obstante clause.
\nIf the Legislature still confers the later enactment
\nwith a non obstante clause it means that the
\nLegislature wanted that enactment to prevail.  If
\nthe Legislature does not want the later enactment
\nto prevail then it could and would provide in the
\nlater enactment that the provisions of the earlier
\nenactment would continue to apply.”\n<\/p>\n
 \t[See also Engineering Kamgar Union Vs. Electro Steels Castings Ltd.
\nand Another, (2004) 6 SCC 36]  <\/p>\n
The right of the workmen to obtain compensation in terms of Section
\n25FFF has not been taken away under the said Act.  The liability to pay
\ncompensation in the case of closure would be upon the employer which in
\nthis case would be the erstwhile company.  By reason of the provisions of
\nthe said Act, only a special machinery has been carved out for payment of
\ndues of all persons including workmen in terms of the provisions contained
\nin Chapter VI of the said Act.  If a workman contends that his lawful dues
\nhave not been paid, his remedy is to approach the Commissioner of
\nPayments constituted under the provisions of the said Act and not to proceed
\nagainst the Appellant herein, in view of Section 5 of the Act.\n<\/p>\n
SYMPATHY:\n<\/p>\n
While construing a statute, ‘sympathy’ has no role to play.  This Court
\ncannot interpret the provisions of the said Act ignoring the binding decisions
\nof the Constitution Bench of this Court only by way of sympathy to the
\nconcerned workmen.\n<\/p>\n
In  A. Umarani vs. Registrar, Cooperative Societies and Others<\/a>
\n[(2004) 7 SCC 112], this Court rejected a similar contention upon noticing
\nthe following judgments  :\n<\/p>\n
“In a case of this nature this court should not even
\nexercise its jurisdiction under Article 142 of the
\nConstitution of India on misplaced sympathy.\n<\/p>\n
In Teri Oat Estates (P) Ltd. Vs. U.T., Chandigarh
\nand Others [(2004) 2 SCC 130], it is stated:\n<\/p>\n
“We have no doubt in our mind that sympathy or
\nsentiment by itself cannot be a ground for passing
\nan order in relation whereto the appellants
\nmiserably fail to establish a legal right.  It is
\nfurther trite that despite an extra-ordinary
\nconstitutional jurisdiction contained in Article 142
\nof the Constitution of India, this Court ordinarily
\nwould not pass an order, which would be in
\ncontravention of a statutory provision.\n<\/p>\n
As early as in 1911, Farewell L.J. in Latham
\nvs. Richard Johnson & Nephew Ltd. [1911-13 AER
\nreprint p.117] observed :\n<\/p>\n
“We must be careful not to allow our
\nsympathy with the infant plaintiff to affect our
\njudgment. Sentiment is a dangerous Will O’
\nthe Wisp to take as a guide in the search for
\nlegal principles.”\n<\/p>\n
\tYet again recently in Ramakrishna Kamat & Ors.\n<\/p>\n
Vs. State of Karnataka & Ors. [JT 2003 (2) SC 88], this
\nCourt  rejected a similar plea for regularization of
\nservices stating :\n<\/p>\n
“We repeatedly asked the learned counsel for
\nthe appellants on what basis or foundation in law
\nthe appellants made their claim for regularization
\nand under what rules their recruitment was made
\nso as to govern their service conditions.  They
\nwere not in a position to answer except saying that
\nthe appellants have been working for quite some
\ntime in various schools started pursuant to
\nresolutions passed by zilla parishads in view of the
\ngovernment orders and that their cases need to be
\nconsidered sympathetically.  It is clear from the
\norder of the learned single judge and looking to the
\nvery directions given a very sympathetic view was
\ntaken.  We do not find it either just or proper to
\nshow any further sympathy in the given facts and
\ncircumstances of the case.  While being
\nsympathetic to the persons who come before the
\ncourt the courts cannot at the same time be
\nunsympathetic to the large number of eligible
\npersons waiting for a long time in a long queue
\nseeking employment.”\n<\/p>\n
CONCLUSION:\n<\/p>\n
For the reasons aforementioned, the impugned judgment cannot be
\nsustained which is set aside accordingly.  The appeal is allowed.  No costs.<\/p>\n","protected":false},"excerpt":{"rendered":"
Supreme Court of India M\/S Maruti Udyog Ltd vs Ram Lal & Ors on 25 January, 2005 Author: S.B. Sinha Bench: N. Santosh Hegde, S.B. Sinha CASE NO.: Appeal (civil) 2846 of 2002 PETITIONER: M\/s Maruti Udyog Ltd. RESPONDENT: Ram Lal & Ors. DATE OF JUDGMENT: 25\/01\/2005 BENCH: N. Santosh Hegde & S.B. Sinha JUDGMENT: […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_lmt_disableupdate":"","_lmt_disable":"","_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[30],"tags":[],"class_list":["post-199829","post","type-post","status-publish","format-standard","hentry","category-supreme-court-of-india"],"yoast_head":"\nM\/S Maruti Udyog Ltd vs Ram Lal & Ors on 25 January, 2005 - Free Judgements of Supreme Court & High Court | Legal India<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.legalindia.com\/judgments\/ms-maruti-udyog-ltd-vs-ram-lal-ors-on-25-january-2005\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"M\/S Maruti Udyog Ltd vs Ram Lal & Ors on 25 January, 2005 - 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