Madras High Court okays order on sale of sugar unit to EID Parry India Ltd

 The Madras High Court has dismissed petitions challenging an industrial tribunal’s order upholding sale of a sugar factory to EID Parry India Ltd in 1992 and also directed the company to offer re-employment to nearly 450 workers of the acquired firm.

Justice V Parthiban upheld the tribunal’s 2008 order and dismissed petitions filed by the union of erstwhile workers of the Nava Bharat Ferro Alloys Ltd’s sugar factory in Pugalur in Tamil Nadu seeking their re-instatement and by EID Parry challenging the tribunal’s direction to offer re-employment.

Lauding the tribunal for striking a balance in adjudicating the dispute, the judge, in his recent order, noted that the principal aim of the Industrial Dispute Act was to achieve industrial peace and equity can play a pivotal and monumental role in achieving the same.

The tribunal had attempted precisely that by offering a solution to the vexed legal battle between the workers and the management, he said.

Noting that the claim for reinstatement by workers alone was prohibited when compensation amount had been paid as per the Industrial Dispute Act, the judge said there was no bar on ordering re-employment of the workers.

“The learned tribunal has precisely done that on the basis of the fact that the dispute was kept pending for 16 years and nearly 200 erstwhile workers had been re-employed on fresh terms by the EID Parry India Ltd,” he said.

It has applied the principle of equity, fair play and good conscience without undermining the statutory scheme and granted the relief to the workmen by means of ordering re-employment and not re-instatement, the judge observed.

“… The impugned award passed by the tribunal does not suffer from any infirmity or irregularity calling for interference of this court,” Justice Parthiban said.

EID Parry had entered into an agreement to buy the sugar unit with building and machinery but without employing 650 workers of Nava Bharat Ferro Alloys Ltd.

According to the agreement, Nava Bharat Ferro Alloys Ltd., terminated the services of the employees by settling their dues in terms of statutory regulations as per the Industrial Dispute Act, facilitating the acquisition in November, 1992.

Later, EID Parry recruited its own employees on fresh terms and offered fresh employment to more than 190 erstwhile workers of the Nava Bharat Ferro Alloys Ltd.

Aggrieved by the transfer of ownership and resultant non-employment, the other workers took up the matter with state government which had referred it to the tribunal.

The tribunal had held that the sale of the unit to EID Parry was a genuine transaction and the same was not a sham and nominal.

It further directed the re-employment of other workers.

EID Parry later filed a writ petition in the high court against the tribunal’s directive for re-employment.

The workers unions also moved the court challenging the award of the tribunal, which did not direct reinstatement of the workmen and only restricted its order to re-employment with effect from December 1, 2008.

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