Fazika Co-operative Sugar Mills v. Jatinder Kumar Gupta and Anr.

Case Details & Bench

Court: High Court
Hon'ble Judges: Dr. Arijit Pasayat
D. K. Jain
Judgment Date: 2007-04-25
Court Decision / Holding: Appeal disposed of. The Supreme Court held that reinstatement with back wages after a long delay was not proper given the peculiar facts and the financial strain on the management. It upheld the order directing a full and final settlement by paying Rs. 2 lakhs to the workman within six months, with the workman releasing all claims and the management incurring no further liability beyond that settlement.
Final Disposition: Appeal disposed of, with directions for full and final settlement of Rs. 2,00,000 in favor of the respondent-workman within six months and release of further claims.

Parties to the Case

Appellants / Petitioners

Fazika Co-operative Sugar Mills

Respondents

Jatinder Kumar Gupta
Anr.

Legal Representation & Advocates

Counsels for Petitioners

• S. Janani
• Deepak Goel

Counsels for Respondents

• Paramjit Singh Patwalia
• Amanpreet Singh Rabi
• Kiran Suri
• Devesh Tripathi

Case Synopsis & Summary

The respondent-workman, dismissed in 1992, raised an industrial dispute under the Industrial Disputes Act, 1947. A reference under s. 2-A and subsequent proceedings culminated in a Labour Court award directing reinstatement with continuity of service along with 50% back wages from the date of the demand notice. The High Court, in a writ petition filed by the management, directed that the respondent be paid subsistence allowance; the Labour Court, however, had not provided for payment before it concluded evidence. When the amounts were finally paid after the proceedings had advanced, the High Court found no illegality in the subsistence payment and dismissed the writ petition. The management argued that directing reinstatement after a long delay was improper and that the High Court’s order was irreversible. The Supreme Court, noting the absence of a fixed payment date but recognizing fixed dates in the proceedings, held that payment of the subsistence allowance after the Labour Court closed its evidence could not be treated as arbitrary. Given the long lapse of time, the substantial losses suffered by the management, and peculiar facts, reinstatement with back wages was deemed inappropriate. The Court directed a full and final settlement by paying Rs. 2 lakhs to the workman within six months, with a release of further claims by both sides.

Provisions of Law Cited

Industrial Disputes Act, 1947, s. 2-AIndustrial Disputes Act, 1947, s. 10(1)(c)

Submissions & Arguments

Contentions of Appellants / Petitioners

The appellant management contends that the High Court erred in requiring reinstatement with back wages after a long delay and in directing the subsistence allowance; it argues that there was no arbitrariness in the timing of subsistence payments and that the Labour Court’s award was not properly implemented. Given the substantial financial loss to the mill (reported around Rs. 35 crores) and the peculiar facts of delay, reinstatement should not be ordered; at most a final settlement should resolve the dispute. The management maintains that the workman should have had an opportunity to lead evidence and that payment after the Labour Court closed evidence was not improper.

Contentions of Respondents

The respondent-workman contends that the subsistence allowance order was proper and that the Labour Court’s award directing reinstatement with 50% back wages should be upheld. He emphasizes that due process and opportunity to lead evidence were essential and that the High Court properly validated the subsistence payment. The respondent argues that the award should not be overturned simply due to the passage of time and that reinstatement with back wages remains the appropriate remedy in such disputes.

Extracted Judgment Text

Exact text extracted from official judgment records.

~ _j_ A # F AZIKA COOP. SUGAR MILLS # _v._ JA TINDER KUMAR GUPTA AND ANR. ## APRIL 25, 2007 ## B [DR. ARIJIT PASA YAT AND D.K. JAIN, JJ.] ## _Labour Laws:_ i .. _Dismissal from service-Management directed to pay subsistence_ c _allowance to workman on a Writ Petition by workman-Management did not pay the same-Labour Court denied permission to management to lead evidence-Ordered reinstatement with back wages-High Court upheld the same-Challenge against-Held, on facts, after long passage of time, it is not proper to direct reinstatement-High Court's order in law is irreversible-_ D _[But in view ][of ][peculiar circumstances, management directed ][to ][pay Rs.2 lacs ] to workman in full and final settlement._ The respondent-workman was dismissed from service and he raised industrial dispute. In Writ Petition filed by workman, the High Court directed the management to pay the subsistence allowance to the workman. As E[appellant-management ][did ][not ][pay ][the ][subsistence ][allowance, ][the ][Labour Court ] decided in favour of workman and refused the permission to the management to lead evidence. Thereafter they paid the subsistence allowance. F Aggrieved management filed writ petition before the High Court High Court dismissed the writ petition. Hence the present appeal. _1_ ## Disposing of the appeal, the Court HELD: 1. One factor is clear that there was no date fixed for payment but dates were fixed before the Labour Court in the proceedings. The payment of subsistence allowance after the order of the Labour Court closing the G evidence so far as the management is concerned cannot be termed as in any manner arbitrary. However, the order of dismissal was passed in 1992 and the industrial dispute was raised under s. 2A of the Industrial Disputes Act, 1947 on 11.5.1994 and a reference was made under Section IO(l)(c) of the Act thereafter. (Para 5] (620-D, E, F] H 618 x 619 FAZIKACOOP SUGARMILLSv.JATINDERKUMARGUPTA[PASAYAT,J.] ~ 2. The management was required to give opportunity to the respondent A to lead evidence on merits. Since the enquiry was allegedly not conducted in fair and proper manner, opportunity was granted to the management to adduce evidence. On the writ petition filed by the respondent-workman the High Court had issued notice. After this long passage of time it would not be proper to direct re-instatement and that too with back wages. It has been pointed out B that the appellant is suffering huge amount of loss amounting to Rs-35 crores. In the facts and circumstances of the case of High Court's order in law is irreversible. But keeping in view the peculiar facts of the case, in full and final settlement of the claims of the respondent-workman a sum of rupees 2 lakhs is directed to be paid within a period of 6 months. The respondentworkman shall not have any further claim and/or the appellant shall have no C liability so far as against respondent-workman is concerned. [Para 6] [620-F, G, H; 621-A] CIVIL APPELLATE JURISDICTION: Civil Appeal No. 2144 of2007. From the Judgment and Order dated 08.04.2004 of the Punjab & Haryana D High Court at Chandigarh in Civil Writ Petition No. 1655 of2004. S. Janani and Deepak Goel for the Appellant. Paramjit Singh Patwalia, Amanpreet Singh Rabi, Kiran Suri and Devesh Tripathi for the Respondents. E The Judgment of the Court was delivered by DR. ARIJIT PASAYA T, J. 1. Leave granted. 2. Challenge in this appeal is to the order passed by a Division Bench of the Punjab and Haryana High Court dismissing the writ petition filed by the appellant. In the writ petition challenge was to the award dated 10.12.2003 F made by the Labour Court, Bhatinda, Punjab. By the said award the respondent No. I-workman was directed to be re-instated in service with continuity of service alongwith 50% back wages from the date of demand notice. Grievance before the High Court was that the appellant was not granted opportunity to lead evidence. It appears that in the writ petition No.14465 of 2001 the G workman was directed to be paid the subsistence allowance. Since the subsistence allowance was not paid the Labour Court decided in favour of the respondent and the appellant was not granted permission to lead evidence. According to the learned counsel for the appellant, the course adopted was illegal. Learned counsel for the respondent-workman, however, supported the orders stating that the order of the Labour Court for payment of subsistence H 620 / SUPREME COURT REPORTS (2007] _5_ S.C.R. A allowance was not illegal and, therefore, the High Court was justified in dismissing the writ petition. 3. A few details so far as the factual position is concerned need to be noted. B 4. By order dated 18.9.2001 passed in C.W.P.No. 14465 of2001 a Division Bench of the High Court had directed the matter to be listed before a learned Single Judge on 19 .2.2002. Meanwhile, it was ordered that the pleadings in the case before the Labour Court were to be completed. It appears that the subsistence allowance amounting to Rs.5291/- was paid by the appellant vide demand draft dated 30.1.2002. But the Labour Court had closed the evidence C of the management vide order dated 5.12.2001 on the ground that the order dated 18.9.2001 passed by the High Court had not been complied with by that date. Undisputedly, the amount of subsistence allowance was paid to the workman after the evidence was closed by order dated 5.12.2001. The management had not paid the subsistence allowance to the workman. He was D not re-instated into service during the enquiry proceedings being conducted by the Enquiry Officer. It is true that no date was fixed. The High Court was of the view that looking at the conduct of the management no interference with the award of the Labour Court was called for. 5. One factor is clear that there was no date fixed for payment but dates E were fixed before the Labour Court in the proceedings. The payment of subsistence allowance after the order of the Labour Court closing the evidence so far as the management is concerned cannot be termed as in any manner arbitrary. However, the order of dismissal was passed in 1992 and the industrial dispute was raised under Section 2A of the Industrial Disputes Act, 194 7 (in short the 'Act') on 11.5.1994 and a reference was made under Section lO(l)(c)of F the Act thereafter. 6. There appears to be some confusion so far as factual position is concerned. The management was required to give opportunity to the respondent to lead evidence on merits. Since the enquiry was allegedly not conducted in fair and proper manner opportunity was granted to the G management to adduce evidence. On the writ petition filed by the respondentworkman the High Court had issued notice. After this long passage of time it would not be proper to direct re-instatement and that to.o with back wages. It has been poin!ed out that the appellant is suffering huge amount of loss amounting of Rs.35 crores. In the facts and circumstances of the case the H High Court's order in law is irreversible. But keeping in view the peculiar facts 621 FAZIKACOOP.SUGARMILLS,..JATINDERKUMARGUPTA[PASAYAT,J.] of the case we direct that in full and final settlement of the claims of the respondent-workman a sum of rupees 2 lakhs shall be paid within a period of 6 months from today. The respondent-workman shall not have any further claim and/or the appellant shall have no liability so far as against respondentworkman is concerned. 7. The appeal is accordingly disposed of. There will be no order as to B costs . . r .. IXJ. Appeal disposed of.