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2006(2) Supreme 134
Supreme Court of India
(From Bombay High Court)
Arijit Pasayat & R.V. Raveendran, JJ.
CEAT Ltd. —Appellant
versus
Anand Abasaheb Hawaldar & Ors. —Respondents
Civil Appeal No. 9442 of 2003
Decided on 16-2-2006
Counsel for the Parties :
For the Appellant : T.R. Adhyarujina, Sr. Advocate, L. Nageswara Rao, R.N. Karanjawala, A.D. Choudhary, Ms. Ruby Singh Ahuja and Mrs. Manik Karanjawala, Advocates.
For the Respondents : Kailash Vasdev, Sr. Advocate, Nayana Buch, Sanjay K. Shandilya, Prateek Kumar and Mrs. V.D. Khanna, Advocates.
Held : In Item (5) of Schedule IV to the Act, the Legislature has consciously used the words ‘favouritism or partiality to one set of workers’ and not differential treatment. Thus, the mental element of bias was necessary to be established by cogent evidence. No evidence in that regard was led. On the contrary the approach of the Industrial Court and the High Court was different. One proceeded on the basis of breach of assurance and the other on the ground of discrimination. There was no evidence brought on as regards the pre-requisite i.e. favouritism or partiality. Favouritism means showing favour in the matter of selection on circumstances other than merit. (per Advanced Law Lexicon by P. Ramanatha Aiyar, 3rd Edition, 2005). The expression ‘favouritism means partiality, bias. Partiality means inclination to favour a particular person or thing. Similarly, it has been sometimes equated with capricious, not guided by steady judgment, intent or purpose. Favouritism as per the Websters’ Encyclopedic Unabridged Dictionary means the favouring of one person or group over others having equal claims. Partiality is the state or character being a partial, favourable, bias or prejudice. (Para 11)
The factual scenario does not establish any favouritism or partiality. When VRS-I Scheme was introduced same was offered to every employee. It is nobody’s case that there was any hidden intent and/or that the employer had any previous knowledge at the time of introducing the scheme that some of the employees would not accept it. It is not the case of the complainants that the employer had at that point of time intended to pay something more to those who did not accept VRS-I. The Memorandum of Understanding which was the foundation for the VRS-II, of course gives a different package, but on the clear understanding that litigations of all types were to be withdrawn. In order to bring in application of Item 9, it was submitted by the respondents that there was an agreement/assurance which was not implemented. It has been urged that a letter can also be construed as an agreement. But that logic is not applicable in all cases. It will depend upon the nature of the letter/communication. As a matter of fact, there is no dispute that there was no Memorandum of Understanding or agreement in writing. The letter of Vice-President on which the Industrial Court and the High Court have placed reliance does not anywhere indicate that even if the fact situation was different the same amount would be paid at all future times. Mere breach of assurance is not favouritism or partisan approach. It has to be definitely pleaded and proved to show that Item 9 of Schedule IV was attracted. As noted above, the Memorandum of Understanding in 1994 came to arrive at because some of the employees went to Court after not accepting VRS-I. The background facts do not establish that the appellant-company was guilty of favouritism or partiality. There is also no plea or proof that the employer indulged in any violence or force to coerce 337 employees to accept VRS-I. Therefore, the complaint of unfair labour practice is not established under Items 5, or 9 or 10 of Schedule IV to the Act. (Paras 17 & 18)
Judgment
Arijit Pasayat, J.—Challenge in this appeal is to legality of the judgment rendered by a Division Bench of the Bombay High Court in a Letters Patent Appeal affirming judgment of a learned Single Judge. By the said judgment learned Single Judge had confirmed the order passed by the Industrial Court, Thane Maharashtra (in short ‘Industrial Court’).
2. The controversy involved in the present appeal arises in the following background :
By Circular dated 30th June, 1992 the appellant - a public limited company incorporated under the Companies Act, 1956 declared a Voluntary Retirement Scheme (hereinafter referred to as the ‘VRS-I’) for its employees which was accepted by the 337 employees. On 16th March, 1994 the appellant entered into a Memorandum of Understanding with the employees’ Union containing another Voluntary Retirement Scheme (hereinafter referred to as the ‘VRS-II’). The same was accepted by 179 employees. Respondents 1 to 6 who had earlier accepted VRS-I filed a complaint before the Industrial Court, Thane on 20th July, 1994 alleging that the appellant-company had committed an unfair labour practice in terms of item nos. 5, 9 and 10 of Schedule IV of the Maharashtra Recognition of Trade Unions & Prevention of Unfair Labour Practices Act, 1971 (in short the ‘Act’). It was contended that one of the benefits which was given to the employees who had accepted VRS-II, namely payment of a sum of Rs. 90,000/- ex-gratia, had not been extended to the complainants who had retired pursuant to VRS-I in 1992. This according to them was illegal, unlawful and amounted to unfair labour practice. The Industrial Court after considering the materials placed before it came to hold that the grievances of the complainants were well founded. Accordingly, by award dated 24.10.1996, it directed the appellant to pay Rs. 90,000/- to each of the employees who had retired under VRS-I, as similar sum had been paid to 179 employees who had accepted VRS-II in 1994. The order passed by the Industrial Court was challenged by the appellant by filing a writ petition in the Bombay High Court. A learned Single Judge dismissed the writ petition by judgment dated 11.7.2001. In fact the learned Single Judge, modified the award by granting additionally, interest at 6% P.A. from 15.4.1994 till date of payment. A Letters Patent Appeal was filed before the Division Bench which was also dismissed by the impugned judgment dated 12/13.6.2003.
3. It is to be noted that before the High Court the following grievances were made by the employer :-
(i) A complaint of unfair labour practice could be filed only by a recognized union and not by an individual workman or some of them. Therefore, in a complaint filed by 6 employees, relief could not be granted to 337 employees.
(ii) In order to sustain the grievance under Item (5) of Schedule IV to the Act, something more than mere differential treatment was necessary to be established. It was incumbent upon the claimants to show that there was any favouritism or partiality shown to one set of workers regardless of merits.
(iii) In order to sustain the grievance under Item (9) of Schedule IV to the Act, it was to be established that there was failure to implement any award, settlement, agreement, and
(iv) In order to sustain the grievance under Item (10) of Schedule IV to the Act, it was to be established that the employer had indulged in act of force or violence.
4. The High Court found that the plea regarding maintainability of the complaint by individual workman was not correct. Further it held that in view of the clear statement in the letter dated 11.7.1992 made by Sri. P. Krishnamurthy, Vice-President of the Company, there was an assurance that all the employees who would accept the VRS-I would be entitled to all benefits which would be given to other employees and that those who would not accept VRS-I would not be paid anything more. Therefore, the High Court held that the fact that Rs. 90,000/- was paid to those who accep
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