R.J. Kochar, J.
1. The Petitioner-employer is aggrieved by the Award dated 30th September, 1995 in Reference (IDA) No. 655 of 1989 passed by the Labour Court granting the relief to the Respondent of reinstatement with full backwages and continuity of service w.e.f. 20.11.1988.
2. It was the case of the Respondent workman before the Labour Court that he was in the employment of the Petitioner in the Tool Room Department doing the work of Metal Sheet Die mounding from January 1987.
3. By an order dated 20.11.1988 the Respondent was terminated from employment with immediate effect. Aggrieved by the said Order of retrenchment he raised an Industrial Dispute under Section 10(1) read with Section 12 of the Industrial Disputes Act, 1947 challenging the propriety and illegality of the order of the retrenchment and claiming the relief of reinstatement with full backwages and continuity of service. The said industrial Dispute was referred by the State Government for adjudication to the 5th Labour Court. The workman filed his statement of claim in justification of his case that the Order of retrenchment was illegal and improper on the grounds that there was violation of Section 25F and Section 25G of the Act as on retrenchment compensation was tendered to him along with order of retrenchment and that seniority list was not displayed under Rule 81 framed under the Act. He further contended that the act of termination was not bonafide as he wanted confirmation in service but instead of confirming him he was terminated from employment. He further contended that he was also doing the work of Plastic Moulding and therefore, he was employed by the Petitioner. He also challenged the order of retrenchment on the ground that there was no notice of change given by the Petitioner as contemplated under Section 9A of the Act.
4. The Petitioner appeared before the Labour Court and filed its written statement contesting the claim of the Respondent workman. It is the case of the Petitioner that it is a small manufacturing unit engaging about 15/20 workmen as per the requirement from time to time depending on the orders received from its customers. The Petitioner claims to have started Tool Room Sheet Metal Die Manufacturing Department in January 1987 wherein the Respondent was employed as Sheet Metal Die Maker. According to the Petitioner it had other work of Plastic Moulding Die in the Tool Room Department. According to the Petitioner, both the kinds of work were of different nature requiring different skill. One was the work of Sheet Metal Die Making and the other was Plastic Die Moulding. The Petitioner had at the relevant time two workmen for the work of Sheet Metal Die Work, one of them was the Respondent. According to the Petitioner, by a letter dated 15.3.1988 one of its major customer cancelled its order for metal sheet dies. The said cancellation of the major order resulted in huge dislocation of work in the department, compelling the Petitioner to decide to close down the department. The Petitioner has relied on the said letter in support of its case of closure of the Sheet Metal Department on account of reduction of work of that kind which became uneconomical for its business. As a consequence of the same the Petitioner issued a letter dated 20.11.1988 to the Respondent informing him that the work which was undertaken by the Petitioner was not progressing satisfactorily and it was found to be uneconomical and therefore, it decided to close down the said work of Press Die Tools Manufacturing. As a result thereof the Petitioner retrenched the service of the Respondent with immediate effect by the said letter requesting him to collect his legal dues from the office immediately on receipt of the said letter which were kept ready as per the calculation enclosed thereof. Along with the said letter a statement of legal dues was enclosed. In the said statement of legal dues amongst other dues component of retrenchment compensation for one year and 10 months i.e. for two years with one month's notice was included. According to the Petitioner, the Respondent refused to accept the said letter and also refused to accept the legal dues offered to him at that time. He did not go to the office to collect the legal dues mentioned in the letter of retrenchment. According to the Petitioner, there was no violation of either Section 25F and/or Section 25G of the Industrial Disputes Act, 1947. There were two workmen in the said department and one of them resigned and collected his dues while the Respondent did not do so and therefore he was retrenched and as such there was no question of display of a seniority list. The Petitioner therefore prayed for rejection of the reference.
5. Both the parties adduced oral and documentary evidence before the Labour Court. On the basis of the material on record the Labour Court held that the order of retrenchment was illegal on account of violation of Section 25F of the Act as no retrenchment compensation was tendered to the workman at the time of retrenchment along with the order of retrenchment. The Labour Court therefore was pleased to quash and set aside the order of retrenchment and to direct the Petitioner to reinstate the Respondent workman with full back wages and continuity of service.
6. Shri Bukhari, the learned Counsel appearing for the Petitioner has submitted that in fact there was no legal requirement for compliance of Section 25F of the Act, as it was not a case of retrenchment as such but it was a case of closure of the department, and therefore, the condition precedent stipulated in Section 25F of the Act was not required to be complied with. He further submitted that the entire department was closed on account of preceding conditions of cancellation of orders of Press Metal Die Work. The entire Press Metal Work was found to be very uneconomical and therefore, the Petitioner was compelled to close down the said work and therefore, the two workmen who were engaged for that work came to be terminated. Shri Bukhari further submitted that the workman Shri Sharma in fact resigned from the employment and accepted his legal dues before the Respondent workman came to be retrenched and therefore, there was no question of displaying of seniority list as contemplated under Section 25G of the Act read with Rule 81 framed thereunder. The Respondent workman was the only workman left in the Metal Sheet Die Work Department. Alternatively Shri Bukhari submits that even assuming that it was a case of retrenchment the Petitioner had complied with the mandatory requirements of Section 25F of the Act. Shri Bukhari submitted that along with the letter of retrenchment the Respondent was offered the retrenchment compensation, wages in lieu of one month's notice and his other legal dues but he refused to accept the letter and legal dues offered to him. This refusal by the Respondent was in the presence of two witnesses who had also endorsed on the said letter to prove that the Respondent workman had in fact refused to accept the letter and the money offered to him. Shri Bukhari further submitted that immediately thereafter the Petitioner had posted the said letter and had also sent Money Order to the Respondent workman but he refused to accept the same. In these circumstances according to Shri Bukhari the finding of the Labour Court that there was no compliance of Section 25F is perverse warranting interference by this Court under Articles 226 and 227 of the Constitution of India. Shri Bukhari also took me through the statement of claim and also through the oral evidence of the workman. He also referred to me the oral evidence adduced on behalf of the Petitioner by examining one Mr. Kamat, Manager of the Company. Shri Bukhari has specifically pointed out from the pleadings of the workman that he had admitted that he was offered the amount of compensation along with the letter and that he did not accept the same. He also pointed out from the statement of claim that the workman had admitted that he did not accept the letter sent by Post and also the Money Order. Shri Bukhari further referred to the evidence of the Manager who was very clear and categorical that along with the letter of retrenchment the amount of retrenchment compensation as required under Section 25F was tendered to the workman but he refused to accept the same. Shri Bukhari further submitted that there was no cross examination of Shri Kamat on that point and his evidence on that point had gone unchallenged. According to Shri Bukhari the order of retrenchment was legal and valid and was bonafide act resulting from the uneconomical working of the department. Shri Bukhari also submitted that there were two workmen engaged for the said work and one of them had resigned and accepted the legal dues and the second workman i.e. the Respondent refused to accept the same and challenged the said order. Since he was the only workman in the department there was no question of displaying seniority list and therefore, there was no violation of Section 25G of the Act and Rule 81 framed thereunder.
7. Shri Ganguli, the learned counsel appearing for the Respondent workman submitted that in fact the Petitioner company being a very small company there was no departmentalisation and that there was only one department of Tool Room wherein both the kinds of work were carried on and that the Respondent was able to do Metal Sheet Moulding as well as Plastic Moulding. Shri Ganguli further submitted that there was violation of Section 25F of the Act as in the letter of retrenchment the Petitioner had deducted an amount of Rs. 4600/= which was due from the workman towards loan taken by him. According to the learned Counsel, no such deduction or adjustment can be made from the amount of the legal dues. Considering the fact of adjustment the workman refused to accept the letter and the amount. Shri Ganguli further submitted that the case was covered under Item 11 of Schedule IV of the Act, which required a notice of change under Section 9A of the Act and in the absence of such notice the retrenchment is bad in law. Shri Ganguli further made a grievance that the Petitioner should not be heard as the Petitioner has not complied with the provisions of Section 17B of the Act as ordered by this Court at the time of admission of the Petition and grant of Stay of the Award of Reinstatement. He finally concluded that in the extraordinary jurisdiction under Article 226 and 227 of the Constitution of India this Court should not interfere with the Award which is based on appreciation of evidence.
8. I have very carefully considered the submission of both the learned counsel and I have also considered the pleadings, evidence and the award given by the Labour Court. I do not find any substance in the contention of Shri Ganguli that the order of retrenchment suffers from illegality or infirmity on account of breach or violation of Sections 25F and 25G of the Act. In fact it is an admitted position that the Respondent workman was offered along with the letter of retrenchment the legal dues enumerated in the statement along with the letter. It is an admitted fact in the pleadings as also in the evidence of the Respondent workman that he had refused to accept the same when he was offered the said letter along with the retrenchment compensation and other legal dues. Paragraph 3 in the statement of claim requires to be reproduced:
'3. The workman says that on 20th November, 1988 he was issued a letter to the effect that his services were terminated with immediate effect as there was no work in the company for him. Though the said letter offered to him, he was not tendered any payment towards his retrenchment compensation and notice pay as mentioned in the said letter. In view of this, the workman had refused to accept the said letter. The Company appeared to have sent the letter by registered Post A.D. to the workman at his residential address. Since the workman was not present at home, the postman did not deliver the said letter to him and returned the same as not claimed. The workman craves leave of this Hon'ble Court to refer to and rely upon the said letter as and when found necessary.'
From the said pleadings of the workman himself it does not lie in his mouth that there was a breach of Section 25F of the Act. In fact his evidence is contrary to his own pleadings. It is therefore, clear that that the workman had not come with clean hands and had given evidence falsely on oath that he was not tendered the retrenchment compensation along with the order of retrenchment. In my opinion from the pleading of the workman read with the evidence of the Petitioner's witness it is crystal clear that there was absolutely no breach or violation of Section 25F of the Act. The letter of retrenchment is absolutely clear requiring the workman to collect the legal dues from the office. It further appears that the workman did not go to the office to collect the legal dues and therefore, he was offered the legal dues but he refused to accept the same. The Petitioner further took care to send the legal dues along with the notice to the Respondent by Post. It is an admitted position that the workman refused to accept the same. If that is so I do not find any illegality in the order of retrenchment. I do not find any violation of Section 25F of the Act. The findings and conclusions of the Labour Court on this point are contrary to the pleadings and evidence on record and therefore they are perverse and deserves to be quashed and set aside. It reflects non application of mind on the part of the Labour Judge. He ought to have carefully gone through atleast the above quoted portion of the statement of claim. Had done so, he would have surely recorded the findings against the workman on the said point. As far as the violation of Rule 81 read with Section 25G is concerned I do not find any substance in the contention of the workman. There were two workmen to do the work of Sheet Metal Die Moulding. One of them resigned and gone. The respondent was the only one workman left he was therefore terminated by way of retrenchment. As a matter of fact it was the closure of the department. Even assuming in favour of the workman that it was a case of retrenchment requiring compliance of Section 25F it cannot be said that there was breach of the said mandatory provision of the Act. Since the Respondent was the only workman there was no question of display of seniority list as contemplated by Rule 81. A display of seniority list surely implies more than one workman. In the present case the Respondent was the only workman left in the department and therefore it cannot be said that the Petitioner committed violation of Section 25G and Rule 81 of the Industrial Disputes Act by not displaying the seniority list. Besides, there is nothing on record to show that the Petitioner had retrenched the senior most workman and had retained junior workman. No means of junior workmen are given. Had it been so I would have appreciated the contention of Shri Ganguli that there was clear breach of Rule 81 of the Act. There is no such case made out by the workmen before the Labour Court that he being the seniormost was terminated and that there were other junior workmen of his category who were retained in the employment. I also do not find any substance in the submission of Shri Ganguli that notice of change under Section 9A ought to have been given by the Petitioner before issuing the order of retrenchment. The Petitioner found the work of the Metal Sheet Die uneconomical and therefore, decided to close the said work in accordance with law by complying with Section 25F and 25G of the Act, such case is never covered by Section 9A read with Item 11 of the Act. Such a notice is not contemplated before effecting retrenchment. Shri Ganguli has relied on the following two Judgments:
1984 LIC 445 - Navbharat Hindi Daily, Nagpur v. Nav Bharat Shramik Sangh.
AIR 1990 SC 2423 - Lokmat News Papers Pvt. Ltd. v. Shankarprasad.
The facts in the said judgments were totally different and therefore, the ratios laid in the said judgments are not applicable to the facts of the present case. The present is not a case or rationalisation. It is a case of simple and pure closure of the working of one department for uneconomical results. Shri Bukhari has relied on the two judgments of the Supreme Court on the point that when retrenchment is effected no notice of change is required:
AIR 1959 SC 722 - Chaganlal Textiles Mills v. Chalisgaon Girni Kamgar Union.
AIR 1982 SC 854 - L. Robert D'Souza v. Executive Engineer, Southern Railway.
9. It is also not possible for me to accept the contention of Shri Ganguli that the employer cannot adjust the loan amount received by the workman while in employment. In the present case Petitioner had offered the legal dues and had adjusted the amount of Rs. 4600/= which was advanced by the Petitioner to the workman. I do not find any illegality or impropriety in recovering the amount of loan given by the employer to the workman. In the present case the loan amount is admitted by the workman. it cannot be said that after severance of the employer employee relationship the employer should be required to chase the workman to recover the loan amount by filing civil litigation. In my opinion the Petitioner employer was fully justified in adjusting the loan amount at the time of parting company with the Respondent workman. By no stretch of imagination it can be said that by adjusting loan amount there is infraction or breach of Section 25F of the Act. It was merely a give and take transaction. The Petitioner had offered the amount and therefore had received the loan amount back from the Respondent workman. On paper the adjustment is reflected to safeguard the interest of the workman that the repaid the loan amount. It therefore do not find any illegality in the act on the part of the Petitioner in adjusting the loan amount from the legal dues of the Respondent.
10. Shri Ganguli has submitted that the Petitioner should not be heard as it has violated Section 17B by not offering the wages pursuant to the Order passed by this Court as the time of Stay of the Award of reinstatement. Shri Bukhari in reply has rightly relied on a very recent Judgment of the Supreme court reported in 2002 S C C (L&S;) 765 - Hindustan Zinc Ltd. v. Industrial Tribunal and Anr. The following order of the Supreme Court squarely answers the contention of Shri Ganguli.:
'Challenging the award made by the Industrial Tribunal holding that the dismissal of the respondent workman was illegal and directing his reinstatement with continuity of service and full back wages and all other attending benefits, a writ petition was preferred. In the writ petition, learned Single Judge who disposed of the matter noticed that the Tribunal had upheld the validity of the enquiry ending with the termination of the service of Respondent 2. However, on merits, the High Court reached the conclusion that the charges/allegations made against the workman concerned are not proved. The High Court without examining the contentions regarding the correctness of the conclusion reached by the Tribunal, firstly, as to the scope of interference when the validity of the domestic enquiry had been upheld and secondly, on merits of the matter decided the writ petition. The High Court noticed that the order made under Section 17-B of the Industrial Disputes Act, 1947, had not been complied with and therefore there was no necessity to go into the merits of the case. This conclusion is rather surprising. The High Court ought to have dealt with the merits of the case and decided the case but it went at a tangent and proceeded to dispose of the matter for non-compliance with the interim order made by the High Court. Under the circumstances, we set aside the order made by the High Court and remit the matter back to the High Court for fresh conclusion in accordance with law. Considering the fact that Respondent 2 workman had been terminated from service as early as the year 1980, we hope the High court will dispose of the matter as expeditiously as possible. The Appeal is accordingly allowed. There will be no order as to costs.'
Merely because Section 17-B is not complied with it cannot be said that the Petitioner employer should not be heard in the matter. Non compliance of Section 17-B definitely give right to the workman to execute the Award by instituting appropriate proceeding which he has already done by filing a Complaint of Unfair Practice under the provisions of Section 28 read with Section 30 and Item 9 of Schedule IV of the MRTU & PULP Act, 1971. He would be entitled to get the whole of the relief as contemplated under Section 17-B of the Act if he would satisfy the condition stipulated therein and if the Petitioner fails to prove that the Respondent was gainfully employed during the relevant period he would not be entitled to get the relief. And if the Petitioner fails to discharge this burden, the workman would get full back wages till he is reinstated as if he was not terminated at all.
11. Besides, the Respondent workman had filed an affidavit in support of his claim under Section 17-B on 23.9.1996 wherein he has stated that he was not gainfully employed. It is very significant to note that on that date the Writ Petition was not admitted and no Stay of the Award of Reinstatement was granted. The effect of Section 17-B would come into operation only when the Award of reinstatement is Stayed. The Petition was admitted and the Award of reinstatement was stayed on 8.9.1998. In fact the Respondent workman ought to have filed his affidavit only thereafter to say that he was not gainfully employed to be able to claim the benefit of Section 17-B of the Act. As set out by the Petitioner in the affidavit in reply to the affidavit filed by the Respondent workman, it appears that the Respondent workman was gainfully employed and therefore, he did not choose to file an affidavit as contemplated under Section 17-B of the Act after 8.9.1998 when his right under that provision accrued. It therefore appears that the Respondent workman was gainfully employed atleast thereafter. The affidavit in reply filed by the Petitioner has factually remained uncontroverted. In the said affidavit the employer has set out all the facts about the gainful employment of the Respondent workman. In all these circumstances it is clear that the Respondent workman has not come to the Court with clean hands from very beginning. In any case the Petitioner has succeeded in proving that the Order of retrenchment was legal and proper and was in compliance of Section 25F and 25G of the Act. The findings recorded by the Labour Court are contrary to the pleadings and the evidence and therefore, the same are perverse warranting interference by this Court under Articles 226 and 227 of the Constitution of India. The impugned Award is therefore quashed and set aside. Rule is made absolute with no order as to costs.