Disputes concerning statutory employment rights, as adjudicated by specialized labour tribunals, are non-arbitrable. Private arbitration agreements cannot override the finality of labour court awards or bypass the mandatory jurisdiction of statutory forums established to protect workers and maintain industrial relations.

JUDGMENT :

K. GOVINDARAJAN THILAKAVADI, J.

This appeal has been filed seeking to set aside the order dated 21.08.2023 passed in AOP.No.148 of 2023 by the learned District Judge, Coimbatore and consequently to set aside the award dated 18.12.2017 passed by the sole Arbitrator.

2.We have heard Mr,P.R.Ramakrishnan, the learned counsel appearing on behalf of the appellant and Mr.Rahul Balaji the learned counsel appearing on behalf of the sole respondent.

3.The learned sole Arbitrator has passed the arbitral award dated 13.03.2019 holding as follows:

a. The respondent shall pay the claimant a sum of Rs.25,65,000/- towards reimbursement of the sums paid to the 9 workmen in terms of the settlement;

b. The claimant is entitled to interest at 9% p.a on the sum of Rs.25,65,000 from 08.09.2016 until the date of the award and interest thereafter would be at 12% p.a;

c) The parties shall bear their respective costs.

4. Shortly stated, in pursuant to the order dated 18.12.2017 passed in O.P.No.533 of 2017 on the file of this Court, the Sole Arbitrator was appointed to enter upon the reference and adjudicate the disputes inter se the parties. In the statement of Claim it is pleaded that the Appellant and the Respondent have engaged in the business of cotton yarn manufacturing and during the course of the business they entered into a Memorandum of Understanding dated 22.12.2004, in terms of which, the Appellant agreed to sell the whole Spinning Unit located in Udumalpet - Dhalli Road as an ongoing concern to the respondent and an Agreement of sale was entered into between them on 19.01.2005 for the sale of property at Udumalpet. Further, it is pleaded that the Appellant and the Respondent entered into a Slump Sale Agreement dated 31.01.2005, whereby the Appellant sold the Spinning Unit as an ongoing concern inclusive of all lands, factory and other buildings for a total sale consideration of Rs. 6.50 Crores. Subsequently, the physical possession of the Unit was also handed over to the Respondent on 31.01.2005 and a Deed of Indemnity was also entered into between the parties on 31.01.2005.

5.It is also pleaded that the Appellant had terminated the services of twelve workers on 12.09.2003 and industrial disputes were raised by the workers challenging the order of termination during the sale process. It is also pleaded that that in terms of Clause 12 of MOU dated 22.12.2004, and by virtue of Clause-11 of Slump Sale Agreement dated 31.01.2005 and by virtue of Clause-2 of Deed of Indemnity dated 31.01.2005, the Appellant agreed to settle the pending disputes / dues before the Unit was transferred to the respondent.

6.Further, by a common Award dated 27.11.2012, the Labour Court, Coimbatore set-aside the order of termination of nine workmen and directed the Respondent to re-instate them into service with continuity of service, full back wages and all other attended benefits. Pursuant to which, the Respondent requested the Appellant to settle the claims of twelve terminated workmen on 19.08.2013.

7.Since the Award of Labour Court, Coimbatore was passed ex-parte, the Respondent filed a petition to condone the delay in setting aside the ex-partie Award, which was dismissed on 06.07.2015 and against which the Respondent preferred a writ petition before this Court and by an order dated 11.08.2015, this Court was pleased to grant Interim Stay on condition to deposit 50% of the back wages within eight weeks. The said order was intimated to the Appellant through letters dated 17.08.2015 and 24.08.2025