Managing Director M/s. The Bombay Film Laboratory Ltd. . vs L. G. Vasule and another

Judicial Analysis Court Copy Headnote Facts Arguments Court observation

1997 Supreme(Bom) 104

IN THE HIGH COURT OF BOMBAY
B.N. Srikrishna, J.
The Managing Director M/s. The Bombay Film Laboratory Ltd..... Petitioner.
Versus
Shri L.G. Vasule another.... Respondents.
Writ Petition No. 5632 of 1995, decided on 25-2-1997.
Advocates appeared :
J.P. Cama with K.P. Anilkumar, for the petitioner.
N.M. Ganguli, for the No. 1 respondent.

Headnote:Section 25-F(b)-Award of Labour Court against Public Limited Company-Processing laboratory not economical-Termination of services-Non-compliance with the statutory provision under Section 25-F declined to grant the relief of reinstatement and preferred to grant relief compensation equivalent to 3,3 years last drawn-Conduct of employer despotical and bona fide-Petitioner should not be penalised having unwillingly on the sues of law,-In the present case, the record shows that the first respondent was served with a letter of retrenchment dated 13th June, 1984, which have the breakup of the retrenchment compensation and the period of service for which it was calculated and full particulars from which any reasonable person could have noticed the deficiency, if any, in the calculation of the retrenchment compensation. When the statement of claim was med on behalf of the first respondent the first respondent did not urge this material defect, but chose to ratse a false and dishonest contention that he was not even offered any retrenchment compensation. Upon trial, the Labour Court has rightly disbelieved that part of the story and accepted the petitioners version that the amount indicated in the letter of retrenchment dated 13th June, 1984 had actually been unconditionally tendered. It was only when the employer filed the documents sometime in January 1995, that perhaps the first respondent realised the nature of short payment. An amendment application was moved by the first respondent in January, 1995. seeking to specifically put on record the fact of short payment and the reasons therefore. Immediately upon being served with a copy of the amendment application, the petitioner employer made good the deficit by deposit the short amount before the Labour Court. Court view this conduct of the employer cannot but be said to be bonafide. The issue as to whether the daily wage of a monthly rated workman, for the purpose of Section 25- F of the Act. should be extracted by dividing the monthly rate by 30 or 36 is not a controversy which is free from doubt. Despite number of judgments having been rendered in connection with Section 4(2) of the Payment of Gratuity Act. 1972. Court own doubts whether the ratio in those cases can straightaway be applied to a case arising under Section 25-F of the Industrial Disputes Act, 1947 in view of the radical differences in the phraseology and the concept of Average pay in Section 2(aaa) of the Industrial Disputes Act, 1947, which is significantly absent in Section 4(2) of the Payment of Gratuity Act, 1972. In such circumstances, to expect any employer however, statute, to unerringly take a correct position on a vexed question of law and modulate his conduct would be utopian. This is not a case where the employer has acted despotically by driving away the workman without having offered any amount of compensation. Court thinks this is a fit case in which the petitioner employer should not be penalised for having unwittingly tort on the toes of the law.
A perusal of the impugned Award of the Labour Court does not show that its attention was drawn to the ratio laid down in Balmer Lawrie, Perhaps, if the Labour Court had been applised of the said judgment it might have been disinclined to grant the relief which he has done. In the result. Court is of the view that the Writ Petition needs to be allowed on the second contention urged by Mr. Cama and the impugned Award of the Labour Court needs to be interfered With. Writ petition allowed. Impugned Award dated 31st August 1995, made by the 5th Labour Court, Bombay in Reference (IDA) No. 263 of 1985 is hereby quashed and set aside. However there till be no order as to costs. The petitioner company shall be entitled to Withdraw the amount of backwages, it deposited in Reference (IDA) No. 263 of 1985 before the Labour Court at Bombay.

JUDGMENT - B. N. SRIKRISHNA, J. :---By this writ petition under Articles 226 and 227 of the Constitution of India, the petitioner company challenges an Award of the 5th Labour Court, Bombay, dated 31st August 1995 made in reference (IDA) No. 263 of 1985 under the provisions of the Industrial Disputes Act, 1947 (hereinafter referred to as "the Act").

2.The facts relevant for disposal of this writ petition are : The petitioner is a Public Limited Company which used to do processing of films at its laboratory at Prabhadevi, Bombay. The first respondent joined the petitioner's service as Cabin Boy on 1st February 1972. He was promoted to the post of Senior Developer in the year 1981. The processing laboratory of the petitioner company was not economical and, therefore, the petitioner decided to trim its work force. On 14th June 1984 the petitioner terminated the services of about sixty workmen including the first respondent. By a letter dated 13th June 1984 the first respondent was informed that due to slackness in business the film processing laboratory was being closed down with effect from the close of the shift on 14th June 1984 and that the first respondent's service as a Senior Developer was being terminated by way of retrenchment. In the said letter, the first respondent was offered the following amounts :-

(a) Wages in lieu of one month's notice... Rs. 1264/-

(b)Retrenchment compensation for 12

days and four months service (wages

for 180 days)... Rs. 7584/-

(c)Salary for 15 days of June 1984

after statutory deductions... Rs. 596.98

---------------- ... Rs. 9444.98 =========

The letter of retrenchment together with the amount of Rs. 9444.48 paise in cash was unconditionally tendered to the first respondent on 13th June 1984 at about 7.00 p.m. in the presence of witnesses, but the first respondent and other workmen refused to accept the same.

3.The first respondent raised an industrial dispute for reinstatement in service together with back wages and continuity. The industrial dispute was processed and resulted in reference (IDA) No. 263 of 1985 being referred to the Labour Court at Bombay.

4.The Labour Court tried the reference and, by its impugned Award, disbelieved the case of the workman that he had been retrenched because of victimisation. It also accepted the case of the petitioner that the statutory dues had been tendered to the first respondent but were refused by him. The Labour Court also found that there was compliance with the rule of last come first go. However, the Labour Court held that section 25-F had been breached, by taking the view that there was short payment of the compensation. Despite the Labour Court's finding that there was non-compliance with the statutory provisions of section 25-F of the Act in full, the Labour Court declined to grant the relief of reinstatement and preferred to grant relief of compensation equivalent to 3.3 years last drawn salary. Thus, a total sum of Rs. 50,000/- (Rupees fifty thousand only) was directed to be paid to the first respondent in lieu of reinstatement and back wages with the liberty to the petitioner to set off therefrom any outstandings of the first respondent workmen. Being aggrieved, the petitioner company is before this Court.

5.Mr. Cama, learned Counsel appearing for the petitioner company, raised two contentions. First, he contends that the view taken by the Labour Court that there was short payment of the retrenchment compensation payable under section 25-F of the Act is incorrect. He points out from the record that during the months of March, April and May 1984, the first respondent had respectively earned wages of Rs. 1252/-, Rs. 1255/- and Rs. 1264/-, thus making a total of Rs. 3771/- for the three complete calendar months and that the average pay over the said period would amount to Rs. 1257/-. Mr. Cama explained the calculations made by the petitioner company by saying that, though the average pay was a smaller amount of Rs. 1257/-, the retre

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