Back
2014 Supreme(Bom) 1238
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
N.M. JAMDAR, J.
Sarva Shramik Sangh - Petitioners
Vs.
M/s. Swan Mills Ltd. - Respondents
WRIT PETITION NO.1842 OF 2005(OS)
WITH
WRIT PETITION NO.6528 OF 2003(AS)
Decided On: 26 June 2014
Advocate Appeared:
Mr.N.M. Ganguli a/w Ms. Karuna Yadav for the Petitioners.
Mr. V.P. Vaidya for the Respondent Nos.1 & 2.
Mr. V.P. Vaidya for the Petitioner.
Mr.N.M. Ganguli a/w Ms. Karuna Yadav for the Respondents
The main legal point established in the judgment is that the Memorandum was not registered under the relevant provisions of law and therefore could not be considered as a settlement under the Bombay Industrial Relations Act. Additionally, the court found that the provisions of Section 18 of the Sick Industrial Companies Act, 1985 did not override the lawful entitlement of the workmen.
Headnote:
Writ Petition - Industrial Disputes - Sick Industrial Companies Act, 1985, Section 18(8), Industrial Disputes Act, 1947, Section 25-FF - The court discussed the legality of the Memorandum under the labour laws and whether the provisions of Section 18 would override the protection given to the workmen under labour laws. The court also analyzed the applicability of Section 25-FF of the Industrial Disputes Act, 1947 and the impact of the scheme sanctioned under the Sick Industrial Companies Act, 1985 on the workmen's claims.
Fact of the Case:
The case involved a dispute between Swan Mills Limited and Sarva Shramik Sangh regarding the payment of wages and reinstatement of workmen. The workmen were faced with closed gates and a notice board informing that the work of the company is closed. A Memorandum of Understanding (MOU) was later arrived at between Swan Mills and Rashtriya Mill Mazdoor Sangh, leading to a dispute regarding the payment of wages and reinstatement of workmen.
Finding of the Court:
The court found that the workmen were arbitrarily turned away from the gates of the factory and their services were not terminated by following a procedure known to law. The court held that the workmen continued to be in the employment of Swan Mills and their services were never terminated. The court allowed the writ petition filed by Sarva Shramik Sangh and dismissed the petition filed by Swan Mills, directing Swan Mills to pay the monetary component payable to the workmen.
Issues: The main issues were the legality of the Memorandum under the labour laws, the applicability of Section 18 of the Sick Industrial Companies Act, 1985, and the impact of Section 25-FF of the Industrial Disputes Act, 1947 on the workmen's claims.
Ratio Decidendi: The court held that the Memorandum was not registered under the relevant provisions of law and therefore could not be considered as a settlement under the Bombay Industrial Relations Act. The court also concluded that the provisions of Section 18 of the Sick Industrial Companies Act, 1985 did not override the lawful entitlement of the workmen. Additionally, the court found that there was no change of employer as per Section 25-FF of the Industrial Disputes Act, 1947, and the services of the workmen were never terminated.
Final Decision: The court allowed the writ petition filed by Sarva Shramik Sangh and dismissed the petition filed by Swan Mills, directing Swan Mills to pay the monetary component payable to the workmen within a period of eight weeks from the date of the judgment.
Writ Petition No.6528 of 2003 is filed by M/s. Swan Mills Limited, Mumbai. Writ Petition No.1842 of 2005 is filed by Sarva Shramik Sangh on behalf of certain workmen of M/s.Swan Mills Limited. Both these petitions challenge the order passed by the Industrial Court, Mumbai dated 14 February 2003. By the impugned order, the Industrial Court partly allowed the complaint filed by the Sarva Shramik Sangh and directed Swan Mills Limited to pay wages to the workmen for the period between 27 January 1989 and 5 February 1991. The Swan Mills Limited is aggrieved by the direction of payment of wages for this period and the Sarva Shramik Sangh is aggrieved by denial of its claim of reinstatement with full back wages.
2. The Sarva Shramik Sangh-Union had taken initiative in forming the workers co-operative to run the mill’s various units in Mumbai. The Swan Mills Limited (Swan Mills) had one unit at Kurla and two units at Sewree. The unit at Sewree was a process house and other unit was a composite textile mill. The material produced at both mills was processed through the process house. The Swan Mill had a Head Office where the various activities such as accounts, purchase, fiber department, cotton department etc. took place. From the Head Office Mill was being supervised.
3. On 27 January 1987, when the concerned members of the Union working in the Head Office had reported to their work, they were faced with closed gates and a notice board informing that the work of the company is closed and the workmen will be informed by general notice when it will be resumed. Thereafter, on 5 February 1991, a Memorandum of Understanding (MOU) was arrived at between Swan Mills and one Rashtriya Mill Mazdoor Sangh (RMMS). In the Memorandum, it was recorded that the Swan Mills will operating Spinning Units including 14 Synthetic Frames. It will also operate Winding, Watch & Ward, Engineering and Electrical Department, Offices, Sanitation, Hospital Dispensary, Rationing Shop and provide employment to the employees in the Spinning Departments in Kurla unit. All other departments of the Mill were to remain closed. It was recorded in the memorandum that, after reopening of the mill, the employer will pay within the period of one month from the date of receipt of resignations, the 15 days’ average pay for each year of continuous service, as ex-gratia payment equivalent to retrenchment compensation and all other legal dues, including gratuity under the Payment of Gratuity Act, bonus, earned wages, leave with wages etc.; to those employees whose services were not required. There were various other clauses in the Memorandum. It was recorded that a suitable agreement under the Bombay Industrial Relations Act would be drawn later. At that time, the Mill was owned by one J.P. Goenka group. One Shri Navin C. Dave, an industrialist, Mumbai was also signatory to the Memorandum, styling himself as the new promoter.
4. The Swan Mills had made a reference to the Board for Industrial and Financial Reconstruction (BIFR) under the provisions of the Sick Industrial Companies Act (SICA). The proceedings took place before the BIFR on 20 February 1992. During the proceedings, proposed Swan Mills Kamgar Sahakari Society Ltd. and other unions, financial institutes, representatives of the governmental bodies were present. The BIFR considered the draft scheme for rehabilitation of the Swan Mill. The scheme was circulated amongst all the parties. At the hearing the draft scheme was discussed. During the hearing, Shri Dave, the new promoter stated, that trial runs in the spinning unit were undertaken and the company was intending to start Tyre-Cord division and automatic looms. It was placed on record that the payment of Rs.3 crores was made to 750 workers. The representative of the financial Institution agreed to grant concessions to make the Swan Mills, viable. Shri Dave informed the Board that he had brought in Promoters Contribution of Rs.936 lacs and the Board of Director
