HON’BLE SRI JUSTICE NAGESH BHEEMAPAKA WRIT PETITION No. 9066 OF 2019

O R D E R:

Questioning the Order passed by Respondent No. 2 Labour Court-II in M.P. No. 51 of 2004, dated 18-01-2019, whereby Petitioner Company - M/s Hyderabad Connectronics Limited was directed to pay Rs. 1,58,12,319/- to Respondents No. 3 to 66, without granting an opportunity of being heard to Petitioner after reopening the case suo motu and without considering the fact that full and final settlement had already been made with some of the Respondents and without ensuring proper service of notice to Petitioner, this Writ Petition is instituted.

2. The grievance of petitioner is that impugned order violates the principles of natural justice. The Labour Court reopened M.P. and proceeded to pass orders without affording them an opportunity to contest. It is stated, though Petitioner had made full and final settlement with 32 employees after they resigned from service, the same was not brought to the notice of the Labour Court, as the unofficial respondents suppressed these material facts. Without deducting the amounts already paid under full and final settlement, the Labour Court granted the entire claim amount to the unofficial respondents, including those whose claims were already settled, which cannot be held as maintainable.

2.1. According to Petitioner Company, by resolution of its Board of Directors dated 21-12-1998, they decided to lay-off employees from 26-12-1998 due to non-availability of raw material, lack of sufficient orders and paucity of funds. Compensation as provided under Section 25-C of the Act was assured to the workmen. This fact was informed to the Commissioner of Labour, A.P., Hyderabad, by letter dated 26-12-1998. It is further stated, the workmen raised M.P. No. 51 of 2004 claiming lay-off compensation and other service benefits to the tune of Rs. 1,58,12,319/-. Petitioner filed its counter denying the claims and contending that the case was not maintainable since the Company had been referred to BIFR and under Section 22 of the Sick Industries and Companies (Special Provisions) Act, proceedings could not be continued. Petitioner filed Writ Petition No. 1809 of 2008 wherein this Court granted stay of further proceedings 01-02-2008. During the subsistence of stay order, several respondent workmen, owing to their personal needs, approached the Deputy Commissioner of Labour, Sangareddy and requested for settlement, which was arrived at in two phases. On 30-06-2010, 19 workmen were paid their legal dues and on 27-04-2018, another 13 workmen were paid their legal dues, in both instances under Memoranda of Settlement under Section 12(3) of the Act after they tendered resignations. Thus, 32 out of 64 respondent workmen received full and final settlement of dues before the DCL, Sangareddy.

2.2. It is the further case of petitioner that the Labour Court purportedly reopened the matter in view of the judgment of the Hon’ble Supreme Court holding that interim stay orders would lapse after six months. Accordingly, notices were issued on 30-08-2018 to both the parties. The notice sent to Petitioner was returned with postal endorsement "Factory closed – Return to Sender" on 01-09-2018. The Counsel for Petitioner, unable to contact them, filed memo dated 01-11-2018 before the Labour Court reporting no instructions, which was accepted. Thereafter, Petitioner came to know of the impugned order only through one of their acquaintances.

2.3. On 21-12-2018, unofficial Respondents filed I.A. No. 66 of 2018 under Section 11(1) of the Act read with Section 151 CPC. to reopen M.P., however, no notice was issued or served on Petitioner nor was substitute service attempted. Despite this, the Labour Court proceeded to allow the petition of the respondent workmen. In the docket, it was recorded that counsel for Petitioner reported no instructions, but the final order dated 18-01-2019 falsely states that Counsel for Petitioner was heard. This establishes serious pro