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IN THE HIGH COURT OF KARNATAKA
Suraj Govindaraj, J.
Stumpp Schuele - Appellant
Versus
Basavaraja.m - Respondent
Writ Petition No. 58467 of 2013 (L-RES)
Decided On : 06-09-2022
CERTIORARI - Industrial Establishment - Companies Act, 1956 - Industrial Employment (Standing Orders) Act, 1946, Sec. 3, 10 - The judgment discusses the applicability of Certified Standing Orders (CSOs) to different industrial establishments of a Company, the possibility of different ages of retirement for different industrial establishments, and the effect of amalgamation of two companies on the CSOs. The court held that each industrial establishment of a Company can have different CSOs and different ages of retirement. On amalgamation, the CSOs applicable to each industrial establishment continue to apply, and the CSOs most beneficial to the employees would not automatically apply to other establishments. The court set aside the Industrial Tribunal's order, holding that the reasoning was improper and not in accordance with law.
Fact of the Case:
The petitioner sought to quash an award by the Industrial Tribunal, which held that the petitioner was not justified in retiring the respondent at the age of 55. The respondent contended that the CSOs of another industrial establishment with a higher retirement age should apply to them.
Finding of the Court:
The court found that the CSOs of each industrial establishment apply separately, and the age of retirement can differ between establishments. The court held that the Industrial Tribunal's reasoning was improper and set aside its order.
Issues: 1. Applicability of CSOs to different industrial establishments of a Company. 2. Possibility of different ages of retirement for different industrial establishments. 3. Effect of amalgamation of two companies on the CSOs. 4. Whether the CSOs most beneficial to the employees of one establishment would apply to another. 5. Whether the Industrial Tribunal's order required interference.
Ratio Decidendi: The CSOs of each industrial establishment apply separately, and the age of retirement can differ between establishments. On amalgamation, the CSOs applicable to each industrial establishment continue to apply, and the CSOs most beneficial to the employees would not automatically apply to other establishments. The Industrial Tribunal's reasoning was improper and not in accordance with law.
Final Decision: The Writ Petition was allowed, and the award of the Industrial Tribunal was quashed.
JUDGMENT
1. The petitioner is before this Court seeking for the following reliefs:
"The petitioner humbly prays, that in the interest of justice, this Hon'ble Court may be pleased to issue a writ in the nature of certiorari and or any other writ or order and quash the impugned award dtd. 3/7/2013, in ID No.42/07 at Annexure-'U' passed by the Industrial Tribunal, Bangalore and pass such other orders as deemed fit in the facts and circumstance of the case".
2. The petitioner is a Company incorporated under the Companies Act , 1956 having its factory at Hosur Road, having an independent factory licence bearing No.MYB 679, having Certified Standard Orders (CSO).
3. There was one other Company viz., M/s.Nippon Electronics (India) Private Limited (for short, 'Nippon'), which was operating at Bull Temple Road, Bangalore, which also had separate CSO.
4. The respondent had been employed with Nippon. Nippon was amalgamated with the petitioner- Company by virtue of the order passed by this Court in Co.P No.27/1983 clubbed with C.A.No.165/1983 dtd. 6/6/1984.
5. It is contended that after amalgamation, the Unit of Nippon was referred to as M/s.Stumpp Schuele and Somappa Private Limited (Electronics Division), Bull Temple Road and the existing unit was referred to as M/s.Stumpp Schuele and Somappa Private Limited (Hosur Road Division). Thus, both the Hosur Road and the Bull Temple Road units existed separately as independent industrial establishments of the petitioner-Company with their respective CSOs.
6. In terms of Clause 19 of the CSO of Nippon, the age of retirement was fixed as 55 years whereas in terms of the CSO of the Hosur Road Unit, the age of retirement was fixed as 58 years.
7. The respondent having attained superannuation at the age of 55 years as per the birth details furnished by the respondent at the time of his appointment, the petitioner-Company informed the respondent vide letter dtd. 14/4/2005 that the respondent would be relieved on the close of working hours on 14/5/2005.
8. It is in that background that the Electronic Division at Bull Temple Road had raised a dispute claiming that retiring them at the age of 55 years is contrary to law. The Government of Karnataka vide endorsement dtd. 31/3/2006 had informed the employees that the retirement of the employees at 55 years is in accordance with the CSOs and the Settlement signed with the Union in 1977 and 1986 and as such, there was no violation of the CSO.
9. The respondent, issued a notice dtd. 3/7/2007 contending that he would retire only at the age of 58 years since the CSOs of the Hosur Road Unit/industrial establishment indicated that the retirement age would be 58 years.
10. The petitioner-Company replied to the same informing the respondent that the respondent being an employed in the Electronic Division at Bull Temple Road, the CSOs for the said Unit/industrial establishment prescribing 55 years as retirement age, it is that age which would be applicable.
11. In the above background, the respondent raised a dispute alleging premature retirement which came to be referred to the Industrial Tribunal by the Government of Karnataka and registered as I.D.No.42/2007. After hearing the parties, the Industrial Tribunal vide its award dtd. 3/7/2013 held that the petitioner was not justified in retiring the respondent on 14/5/2005 and it is aggrieved by the said award, the petitioner-Company is before this Court.
12. Sri.S.N.Murthy, learned Senior Counsel appearing for the petitioner would submit that:
12.1. The Electronic Division at Bull Temple Road was always maintained separately. It is never part of the Hosur Road Unit. Infact, the Bull Temple Road Unit was sold with business and machinery to M/s.NEL Private Limited under a Business Transfer Agreement dtd. 1/4/2011. The purchaser shifted the factory to Kanakapura with all 42 employees and plant and machinery in furtherance of which the petitioner-Company demolished the factory building in Bull Temple Road after which
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