Chakiath Agencies Pvt. Ltd. v. The General Secretary, Cochin Commercial Employees Association and Industrial Tribunal, Alappuzha

IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE S.SIRI JAGAN WEDNESDAY, THE 4TH JUNE 2008 / 14TH JYAISHTA 1930 WP(C).No. 25274 of 2004(H) -------------------------- PETITIONER: ------------ M/S. CHAKIAT AGENCIES PVT.LTD., SUBRAMANIAN ROAD, WILLINGDON ISLAND, KOCHI-682003, REPRESENTED BY ITS DIRECTOR. BY ADV. SRI.B.S.KRISHNAN (SR.) SRI.K.ANAND (A.201) SMT.LATHA KRISHNAN RESPONDENTS: ------------- 1. THE GENERAL SECRETARY, COCHIN COMMERCIAL EMPLOYEES ASSOCIATION NO.492/1946, 1/16/18, AMARAVATHI ROAD, COCHIN-682 001. 2. INDUSTRIAL TRIBUNAL, ALAPPUZHA. R1 BY SHRI.P.RAMAKRISHNAN THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON 04/06/2008, ALONG WITH WPC NO. 27590 OF 2004 THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: W.P(C).No.25274/04 ## APPENDIX ## PETITIONER'S EXHIBITS: - P1. COPY OF THE RETRENCHMENT ORDERDTD.31.1.00. - P2. COPY OF THE CLAIM STATEMENT. - P3. COPY OF THE WRITTEN STATEMENT BY THE MANAGEMENT. - P4. COPY OF THE REJOINDER. - P5. COPY OF THE ARGUMENT NOTE BY THE COUNSEL FOR THE MANAGEMENT. - P6. COPY OF THE AWARD PASSED BY R2 DTD.31.3.04 IN ID.NO.99/2000. ## Sdk+ ///True copy/// P.A. to Judge ## S.SIRI JAGAN, J. ================== W.P.(C).Nos.25274 & 27590 of 2004 ================== Dated this the 4[th] day of June, 2008 ## J U D G M E N T Both the management and the Union in I.D.No.99/2000 before the Industrial Tribunal, Alappuzha, challenge the award in that I.D., in these two writ petitions. The award is Ext.P3 in W.P (C).No. 27590/2004 and Ext.P6 in the other writ petition. 2. The issue referred for adjudication was: “Whether the retrenchment of Sri.K.A.Felix by the management of M/s. Chakiath Agencies (P) Ltd., Willingdon Island, Kochi-3 is justifiable or not? If not, what relief the worker is entitled to?” 3. The Tribunal found that the retrenchment was not in compliance with Section 25-G of the Industrial Disputes Act, but did not grant any relief to the workman holding as follows: “.. If in any of the eight branches any junior to the workman in service was retained as Peon as on the date 31.1.2000, the retrenchment effected in the workman's case cannot be sustained, because it would be illegal. As no sufficient material is forthcoming in evidence in that respect with reference to the position prevailing in branches, this Tribunal can only pass an award with such a conditional declaration on the legality of retrenchment.” The refusal to grant relief to the workman is challenged by the workman in W.P(C).No. 27590/2004 and the award as a whole is w.p.c.27590/04 etc. 2 challenged by the management in W.P(C).No. 25274/2004. 4. Before going into the merits of the contentions, I may narrate a few facts which are relevant for deciding the issues in question. Originally, there was an establishment by name “Chakiat Agencies”, which was a partnership firm. They were holding an agency business of a shipping company by name M/s.Sea Land Service, Inc. Apparently on insistence of the said company that they would deal only with a company incorporated under the Companies Act, the said firm formed a company by name “Chakiat Agencies (P) Ltd. and the entire business operations of M/s.Sea Land Service, Inc. were transferred the said company. The company lost its agency business of M/s.Sea Land Service, Inc. On the ground that, as a result the entire business operations of the company had come to a stand still, the company decided to close down its business pertaining to Sea Land Agencies with effect from 1.2.2000. Accordingly, the workman and other workmen were retrenched from service. The Union raised an industrial dispute in respect of the workman involved in this dispute which resulted in the impugned award. 5. Originally the workman took the contention that w.p.c.27590/04 etc. 3 Chakiat Agencies (P) Ltd. and Chakiat Agencies are inter connected establishments and therefore, simply because the agency business of Chakiat Agencies (P) Ltd. has been stopped, that does not mean that the entire workmen of the Chakiat Agencies Private Ltd. can be retrenched. According to him, since these two establishments have functional integrality retrenchment could have been effected taking into account workmen of both establishments as a whole. The Union raised another contention that the case of the company that they have retrenched workmen in accordance with seniority of workmen in each category is not correct for two reasons. First is that even after retrenchment they were employing persons in the category in which the workman was working. The second is that the company had eight other branches all over India and retrenchment was not in accordance with the common seniority of workmen in all these eight branches taken together and therefore, retrenchment is violative of Section 25-G of the Industrial Disputes Act. The Industrial Tribunal, after discussing the evidence in detail, ultimately came to the conclusion that the retrenchment of the workman is in violation of Section 25-G of w.p.c.27590/04 etc. 4 the Act. Several reasons are stated for arriving at the conclusion, in the course of discussion of evidence, which are slightly confusing. But from the last paragraph of the award, it appears to be on the basis that the common seniority in respect of all branches of the company all over India was not drawn up and retrenchment effected on the basis of that. But no relief was granted to the workman because of lack of evidence as to the position in other branches. 6. The management would contend that the entire findings in the award are totally perverse. Firstly, they would contend that admittedly the company lost its business with M/s.Sea-Land Service Inc. and all the workmen of the Cochin unit of the company, including the petitioner, were retrenched from service by paying compensation in respect of which there is no serious dispute although the Union would vaguely contend that retrenchment compensation was not calculated properly. The contention is that in so for as the fact of retrenchment of entire workmen of the Cochin office of the company is not in dispute, it cannot now be contended by the Union that the retrenchment is in violation of Section 25-G. In support of his contention, the w.p.c.27590/04 etc. 5 counsel for the management would project the fact that Chakiat Agencies and Chakiat Agencies (P) Ltd. are two independent and separate establishments which cannot be clubbed together for the purpose of deciding whether the retrenchment of workman is illegal or not. According to the counsel for the management, the same is the case with the branches which are also kept entirely separate from the Cochin office and the same cannot be clubbed together for the purpose retrenchment. The counsel for the management relies on the following decisions in support of his case:- _**Workmen of M/s.Blundell Eomite Paints Ltd. vs. M/s.Blundell Eomite Paints Ltd. And Others**_ [1971 II LLJ 265], _**Indian Cable Co., Ltd., v. Its workmen**_ [1962 I.LLJ 409], _**Hariprasad v. A.D.Divelkar**_ [AIR 1957 SC 121] and _**Kamleshkumar Rajanikant Mehta v. Presiding Officer, Central Government Industrial Tribunal No.1 and another**_ [1980 I.LLJ 337]. 7. On the other hand, the counsel for the workman would contend that even after the retrenchment of the workman, other peons were being employed at the Cochin office of the company itself for proving which the Union had obtained a direction from w.p.c.27590/04 etc. 6 the Tribunal to the management to produce the despatch register of the company which would show that a peon was being employed as a messenger in the Cochin office even after retrenchment of the workmen. An affidavit was filed by the management to the effect that they were not maintaining despatch register for that particular period. But in cross examination the management witness admitted that they were in fact maintaining despatch register prior to the retrenchment and some time later also. According to the counsel for the Union, from the refusal on the part of the management to produce the despatch register an adverse inference can be drawn to the effect that if produced, the same would be against the case of the management. The contention is that the despatch register would contain signature of peons who were delivering messages on behalf of the company which would prove that even after retrenchment of the workman, the company was using the service of other peons. He would point out that it is an admitted fact that the workman was the senior most peon in the Cochin office and therefore, after retrenchment the company cannot engage the services of other peons to do the work of peon w.p.c.27590/04 etc. 7 without first employing the workman in question. Of course, he would also support the findings regarding the other branches being part of the Cochin office and retrenchment being violative of Section 25-G on the ground that the retrenchment was not in accordance with the common seniority of workmen in all branches taken together. Although elaborate arguments were advanced by the counsel for the management on the question as to whether all these branches could be clubbed together for the purpose of deciding the validity of the retrenchment, I am not going into all those decisions because, according to me, the evidence on record is sufficient to prove that even after retrenchment of the workman in question who was the senior most peon of the company, an inference on the basis of evidence can be drawn to the effect that the company was in fact employing other peons for the purpose of the company. 8. Admittedly, at the time of retrenchment there were 20 Executives and 28 workmen working in the Cochin office of the company from where the workman was retrenched from service. The case of the management was that the entire 28 workmen were retrenched from service and 13 Executives were only w.p.c.27590/04 etc. 8 retained since 7 of the 20 left the service of the company. They went on to contend that it was not necessary to employ any workman since, according to them, the management was getting the work formerly done by the personnel in the workmen category, done through the Executive staff and even the work of the attenders were also entrusted to them. When 20 Executives were functioning with the help of 28 workmen, it is beyond comprehension as to how 13 Executives could function without assistance from any workmen at all, even a peon. The company is a private limited company having eight branches all over India. The company was running at a profit even after loss of business from M/s.Sea Land Service, Inc. The management also had no case that the Cochin office has been stopped altogether at any time. They do not even contend that the Cochin office has been stopped even now. The Cochin office is functioning through out despite the loss of business from M/s.Sea Land Service Inc. That being so, an ordinary prudent man cannot accept the contention of the management that they were working with 13 Executives and no sub staff at all, not even a peon. Of course, the counsel for the management, citing decisions on the subject, would argue w.p.c.27590/04 etc. 9 that it is for the management to arrange it affairs the way they want and this Court cannot sit in appeal over the correctness of such arrangement. No doubt, such freedom cannot be denied to the management. But here the question is whether the contention of the management that they had in fact made such an arrangement excluding workmen to have their business done only with executives. From the evidence on record, the irresistible conclusion is that they had not made such an arrangement, but such contention has been raised only to suit their case in the industrial dispute and in fact at least another workman was employed without employing the workman involved in the industrial dispute. The company is a company registered under the Companies Act having 8 branches all over India. Substantial activities of those branches were admittedly being carried out in Cochin office. That being so, naturally, the Cochin office would have had to have extensive correspondence with other branches for which a company registered under the Companies Act certainly requires a despatch register. The fact that, despite a direction to produce the despatch register the management replied that they were not keeping the despatch register for the w.p.c.27590/04 etc. 10 particular period only would naturally lead to the adverse inference that they were actually maintaining the register for that period also and if the same was produced would prove the case of the workman that after retrenching the workman, they were actually employing other peons. So I am of opinion that the evidence taken altogether would lead to the irresistible inference that the preponderance of probability is in favour of the Union's case that after the retrenchment of the workman, the management was in fact employing other peons for the purpose of their business. Admittedly, the workman was the senior most peon at the time of retrenchment. Therefore, without employing the petitioner first they could not have engaged other peons. In such circumstances, clearly the retrenchment was not a bona fide act at least in the case of the workman involved in the industrial dispute. In the above circumstances, I do not have any doubt in my mind that the workman is entitled to the relief of reinstatement in this case. However, because of the peculiar circumstances of the case, I am of opinion that he need be paid only 50 per cent of back wages. Accordingly, the award impugned in these writ petitions is modified to the effect that the workman w.p.c.27590/04 etc. 11 shall be reinstated in service with 50 per cent back wages with all attendant benefits. W.P(C).No. 27590/2004 is allowed as above and W.P(C).No. 25742/2004 is dismissed. sdk+ Sd/S.SIRI JAGAN, JUDGE ///True copy/// P.A. to Judge