National Textile Corporation (S. M. ) Ltd. . vs Girdharisingh Pratapsingh and others

Judicial Analysis Court Copy Headnote Facts Arguments Court observation

1997 Supreme(Bom) 377

IN THE HIGH COURT OF BOMBAY
R.M. Lodha, J.
National Textile Corpn. (S.M.) Ltd...... Petitioners.
Versus
Girdharisingh Pratapsingh others ..... Respondents.
Writ Petition No. 2115 of 1995, decided on 24-7-1997.
Advocates appeared :
Mrs. Meena Doshi, for the petitioner.
R.J. Kochar, for respondents No. 1 to 16.
L.S. Vyas, for respondent No. 20.
Raju Mane, for respondents No. 21, 22 23.

Headnote:Section 33-C- Textile Undertakings (Taking-over of Management) Act, 1983, Section 3(7)- Textile Undertakings (Nationalisation) Ordinance of 1994, Section 5(3)-Liabilities dismissed-Labour Court ordering payment of arrears prior to 1982Challenged-Ground-As per Act NTC not liable to clear arrears-Any liability used in the Section 3(7) does not include wages, bonus, arrears Not maintainable.- That the arrears of wages, bonus and leave wages prior to appointed day payable to the workmen are not covered in the expression, any liability under Section 3(7) and therefore, the NTC is liable is noted to be rejected. The expression any liability occurring in sub-section (7) of Section 3 is an expression of wide connotation and import and it covers and comprehends every pecuniary obligation that may have been incurred by the textile company in relation to the textile undertaking before the appointed day by way of employment, business, commercial or trading activity and is not confined to commercial, business or such like liability as sought to be urged by counsel. If, the erstwhile textile company did not pay the wages which became due to the workmen, prior to its taking-over, obviously it was pecuniary obligation of the erstwhile company and such obligation has to be discharged by the erstwhile company under Section 3(7) of the Act of 1983. The apex Court in Rashtriya Mill Mazdoor Sangh has held the gratuity payable to a workman prior to the appointed day is a liability incurred by erstwhile textile company, fortiori the outstanding wages to a workman prior to taking over is also a liability incurred by the erstwhile textile company. The discussion by the apex Court in paragraphs 10 and 11 of the report in Rashtriya Mill Mazdoor Sangh case is complete answer to the contention of counsel, and Court has no hesitation in holding that the claim made by the workmen in the application under Section 33-C(2) relating to arrears of wages, bonus and leave wages prior to taking-over is covered under the expression any liability under Section 3(7) of the Act of 1983. It was held that the order passed by the Labour Court cannot be sustained and has to be set aside.
       Sections 33-C and 25-F-Constitution of India, Articles 226 and 227- Textile Undertakings (Takingover of Management) Act, 1983, Section 3(7)-Textile Undertakings (Nationalisation) Ordinance, 1994, Section 5(3)- Textile Mill taken-over by NTC-Wages and other arrears-Prior to take-over-Whose responsibility-Labour Court ordering to pay arrears before take-over-Held-Act does not make NTC liable to pay arrears before take-over.-It was held that the arrears of wages for the period from April 1983 to 18.10.1983 which is past liability, such liability cannot be foisted on the NTC even if, the workman continued to be in employment with NTC after taking-over and such liability is only enforceable against the erstwhile company. Similarly, for the bonus as well as leave wages prior to the appointed day i.e., 18.10.1983, the liability is only enforceable against the erstwhile company and not against the Central Government and the Custodian. Section 3(7) of the Act of 1983 which has a bearing on the past liabilities of erstwhile company in relation to textile undertaking admits of no doubt or ambiguity.
       Articles 226 and 227-See Industrial Disputes Act, 1947, Sections 25-F and 33-C.
       Textile Undertakings (Nationalisation) Ordinance, 1994
       Section 5(3).
       Section 5(3)-See Industrial Disputes Act, 1947, Sections. 25-F and 33-C.
       Textile Undertakings (Taking-over of Management) Act, 1983
       Section 3(7)-See Industrial Disputes Act, 1947, Sections 25-F and 33-C.
       Section 3(7)-See Industrial Disputes Act, 1947, Section 33-C.

JUDGMENT - R.M. LODHA, J.:---The petitioner, National Textile Corporation (S.M.) Ltd., in this writ petition, impugns the order dated 30th June, 1994 passed by 2nd Labour Court, Bombay whereby it directed the petitioner to pay Rs. 11,716/- to each of the respondents No. 1 to 16 in all a sum of Rs. 1,88,486/- within two months from the date of the order.

2.The respondents No. 1 to 16 (for short, 'workmen') made an application under section 33-C(2) of the Industrial Disputes Act, 1947 (for short, 'I.D. Act') before the Labour Court against the petitioner (for short, 'NTC') and one Mr. Madanlal M. Tatia, Managing Director, Shri Sitaram Mills Limited, claiming arrears of wages for the period from April, 1983 till 19th October, 1983 collectively amounting to Rs. 92,720/- the bonus @ 8.33% for the years 1980, 1981, 1982 collectively amounting to Rs. 41,943/-, and, the leave wages for 90 days @ 30 days leave per year for the years 1981, 1982 and 1983 collectively amounting to Rs. 41,943/-. Thus the workmen claimed that they were entitled to amount of Rs. 1,88,406/- as aforestated. The N.T.C. contested the application filed by the workmen and disputed it's liability principally on the ground that the claim made by the workmen was in respect of the period prior to appointed day i.e., 18-10-1983 and, therefore, the same was not enforceable against the Government of India or against the N.T.C. which is additional custodian. The second Labour Court, however, by the impugned order dated 30th June, 1994 held that the workmen have proved that the N.T.C. was liable to pay their dues and accordingly passed the order against the N.T.C.

3.Mrs. Doshi, the learned Counsel appearing for N.T.C. assailed the order passed by the Labour Court and urged that the Labour Court seriously erred in misconstruing the provisions of Textile Undertakings (Taking Over Management) Act, 1983 (Act of 1983) and particularly section 3(7) of the said Act. She would urge that section 3(7) of the Act of 1983 by removal of doubts has made it clear that any liability incurred by Textile company before the appointed day shall be enforceable against the Textile Company and not against the Government and/or custodian and, therefore, no liability could be fastened upon N.T.C. since the claim of the workmen related to the period prior to the appointed day. She would rely upon the judgment of this Court in (The National Textile Corporation (South Maharashtra) Ltd. petitioner v. Bhagirathi Gopal Martal others)1, 1990 M.L.J. 1315. (National Textile Corporation (South Maharashtra) Ltd. petitioner v. Shramik Janata Union and others, respondents)2, 1991(1) Bom.C.R. 160 and (Rashtriya Mill Mazdoor Sangh, appellant v. National Textile Corporation (South Maharashtra) Ltd. and others, respondents)3, A.I.R. 1996 S.C. 710.

4. Mr. R.J. Kochar, the learned Counsel appearing for the workmen on the other hand vehemently contended that the employment of the workmen continued with N.T.C. from the appointed day and, therefore, the N.T.C. was liable to make payment of the outstanding wages, bonus and leave wages for the period prior to appointed day as the said amount was earned by the workmen. Mr. Kochar sought to distinguish the judgments cited by learned Counsel for N.T.C. by urging that in none of the said cases the employment of the workmen continued with N.T.C. after appointed day. Mr. Kochar would also urge that the arrears of earned wages, bonus, or leave wages prior to appointed day cannot be said to be covered in the expression 'any liability' in section 3(7) and, therefore, the N.T.C. is liable and the Labour Court cannot be said to have committed any error in passing the impugned order.

5.The claim of the workmen viz. arrears of wages, bonus as well as leave wages indisputably relate to the period prior to appointed day i.e. 18th October, 1983. There is also no dispute that the workmen continued to be in employment with N.T.C. after the erstwhile mill viz. Shri Sitaram Mills Ltd.

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1997 Supreme(Bom) 377

Cases Referred (3)