KERALA STATE RUBBER CORPORATION LTD v. C.P. PRAMOD & K. VINODAN

Case Details & Bench

Court: High Court of Kerala
Hon'ble Judges: K. Surendra Mohan
P. V. ASHA
Judgment Date: 2016-03-16
Court Decision / Holding: Writ appeal dismissed. The appellants are directed to pay 50% of the arrears of back wages ordered by the learned Single Judge within two weeks from today, and the balance within one month thereafter.
Final Disposition: Writ Appeal dismissed; Rubco to pay 50% of arrears within two weeks and the balance within one month.

Parties to the Case

Appellants / Petitioners

KERALA STATE RUBBER CORPORATION LTD

Respondents

C.P. Pramod
K. Vinodan

Legal Representation & Advocates

Counsels for Petitioners

• C.P. Mohammed Nias

Counsels for Respondents

• K.P. Sreekumar
• P.M. Satheesh

Case Synopsis & Summary

This writ appeal challenges an interim order dated 25-01-2016 by a Single Judge in I.A.17285/2012 in W.P.(C) 9638/2012, arising from an award of the Labour Court, Kannur in I.D. Nos. 10/10 and 11/2010. The Labour Court held that denying employment to the respondents was unjustified and directed reinstatement with back wages. The respondents sought payment of last drawn wages under Section 17B of the Industrial Disputes Act, 1947, and the Single Judge ordered such wages due to the delay in implementing the reinstatement order. Rubco, a cooperative society, contends that 17B cannot be invoked where the employer itself has closed a unit; it relies on a Full Bench decision of this Court in N. Mahalingam & Company v. T. Santhosh Kumar (2015) to support this position. Counsel for the respondents argues that Rubco operates through multiple units and closure of one unit does not equate to closure of the entire establishment; absorption of workers into another unit was contemplated. The High Court, noting that Rubco is a multi-unit employer and that the 17B petition had persisted since 2012, declines to strike down the 17B direction entirely but holds that the Full Bench dictum does not apply to these facts. The appeal is dismissed with a defined timeline for payment of arrears: 50% within two weeks and the balance within one month.

Provisions of Law Cited

Industrial Disputes Act, 1947 - Section 17B

Submissions & Arguments

Contentions of Appellants / Petitioners

Rubco argues that invoking Section 17B is inappropriate where the company is a cooperative society operating multiple units; closure of one unit does not imply closure of the entire establishment, and absorption of workers into another Rubco unit was contemplated. It relies on the Full Bench decision N. Mahalingam & Company v. T. Santhosh Kumar (2015) (1) KHC 54) to contend that 17B cannot attach to a closed unit or to an enterprise that has effectively ceased operations; the writ petition challenges the Labour Court’s award and the protective remedy of 17B should not override the broader enterprise context.

Contentions of Respondents

The respondents contend that Rubco functions via several units; closing one unit does not terminate the entire establishment, and workers can be absorbed into other units of Rubco. They emphasize that the 17B remedy is designed to mitigate hardship during delays in implementing reinstatement orders and that the purpose of Sec. 17B remains applicable given the prolonged pendency of the petition since 2012; the unit’s closure does not extinguish the employer’s obligations under the Labour Court award.

Cited Precedents (1)

Case Name	Citation	Treatment	Explanation
N. Mahalingam & Company v. T. Santhosh Kumar	2015(1)KHC 54	Distinguished	The Full Bench dictum relied upon by the appellant is not applicable to the facts of this case; the Kerala High Court does not follow that dictum here.

Extracted Judgment Text

Exact text extracted from official judgment records.

IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT: THE HONOURABLE MR.JUSTICE K.SURENDRA MOHAN & THE HONOURABLE SMT. JUSTICE P.V.ASHA WEDNESDAY, THE 16TH DAY OF MARCH 2016/26TH PHALGUNA, 1937 WA.No. 394 of 2016 () IN WP(C).9638/2012 ------------------------------------------ AGAINST THE ORDER/JUDGMENT IN WP(C) 9638/2012 DATED 25-01-2016 APPELLANT(S)/RESPONDENT IN IA/PETTIONER IN WPC: ------------------------------------------------- KERALA STATE RUBBER CORPORATION LTD (RUBBCO), REG.NO. 4412, 4TH FLOOR K.V.R.TOWERS, SOUTH BAZAR, KANNUR-670002 REPRESENTED BY ITS PUBLIC INFORMATION OFFICER MS.BINEESHA. BY ADV. SRI.C.P.MOHAMMED NIAS RESPONDENT(S)/PETITIONERS IN IA/RESPONDENTS IN WPC: ----------------------------------------------- 1. C.P.PRAMOD, AGED 35 YEARS S/O.PRABHAKARAN, KANDATHIL HOUSE, MUNDALOOR PO KOTTAM, KANNUR DISTRICT 670622 2. K. VINODAN, AGED 40 YEARS S/O.KUNHIRAMAN, KAYAMTHALA HOUSE, KUTTIKANAM PO KANNUR DISTRICT 670663 R1 BY ADV. SRI.K.P.SREEKUMAR R1 BY ADV. SRI.P.M.SATHEESH THIS WRIT APPEAL HAVING BEEN FINALLY HEARD ON 16-03-2016, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: JJ K. SURENDRA MOHAN & P.V.ASHA, JJ. ------------------------------- W.A. NO.394 OF 2016 ---------------------------------Dated this the 16[th] March, 2016. ## JUDGMENT Surendra Mohan, J. The appellant is before us challenging an interim order dated 25.1.2016 granted by the learned Single Judge in I.A.17285/2012 in WPC 9638/2012. The appellant had filed the writ petition challenging Ext.P10 award of the Labour Court, Kannur in I.D.Nos:10/10 and 11/2010. As per the impugned award the Labour Court has found that the denial of employment to the respondent herein was unjustified. Therefore they have been directed to be reinstated in service, with back wages. The appellant/management had filed WPC 9638/2012 challenging the award of the Labour Court. 2. I.A.17285/2012 was filed by the respondents seeking a direction under Section 17B of the Industrial Disputes Act, W.A 394/2016 2 1947 (the 'Act' for short) for payment of the last drawn wages. It appears that innumerable chances had been granted to the appellants for filing counter affidavit to the said petition. However, no counter affidavit was filed. Therefore, noting that no counter affidavit had been filed despite the lapse of three years, the learned Single Judge has issued a direction to pay the wages to the respondents with arrears. 3. According to Adv.C.P.Mohammed Nias who appears for the appellant, the respondents were the workmen of Rubco Cycle Tyre and Tube manufacturing company. The company had to be closed down. According to the learned counsel, no direction to pay wages under Section 17B of the Act could be issued where the company itself has been closed down. Reliance is placed on the decision of a Full Bench of this Court in N.Mahalingam & Company v. T.Santhosh Kumar [2015(1)KHC 54] in support of the above contention. 4. Adv.K.P.Sreekumar who appears for the respondents on the other hand contends that the appellant herein is a co- W.A 394/2016 3 operative society. The appellant had been setting up various units at different places. The respondents were employed at one of the units. Closure of one of the units does not involve closure of the establishment in which the workmen were actually working. In fact, when the unit was closed down a decision had been taken to absorb the workmen in one of the other units owned by the appellant. The direction for reinstatement has also been issued with respect to another establishment, it is pointed out. For the above reason, it is contended that the workmen who were employees of the Rubco have been directed to be reinstated in one of the units under the very same management. The above being the position, the dictum of the Full Bench on which reliance is placed has no application to the facts of the present case. 5. Heard. The appellant before us is the Rubco, which is a co-operative society. It is the case of the appellant that, the co-operative society has been setting up separte units at different places for the purposes of carrying on different types W.A 394/2016 4 of activities. According to paragraph 2 of Ext.P9 written statement filed by the management before the Labour Court, what is stated is that, the Rubco Cycle Tyre and Tube factory was one among the various industrial units set up by floating different companies under the Companies Act, by itself. Therefore, admittedly the Rubco has been carrying on its activities through different companies set up at various places. It has been further stated in Ext.P9 that, the management had taken a decision on 5.4.2008 to absorb all the workers of Rubco Cycle Tyre and Tube Manufacturing factory to Rubco Huat Woods Pvt. Ltd at Chonadam on the same terms and conditions. It is evident from the stand taken by the appellant that, Rubco is the employer of the workmen. That is the reason why, on closure of one establishment, they have decided to absorb the workmen in the other establishment of theirs. The above being the factual scenario, we are not satisfied the dictum of the Full Bench has any application to the facts of the present case. This is not a situation where the W.A 394/2016 5 establishment that had employed the workmen had been closed down. 6. The liability to pay last drawn wages under Section 17B of the Act on the management is a corollary of the right to maintain the challenge against reinstatement that has been made in the writ petition that is pending. Therefore, it is only appropriate that the appellant pays the wages under Section 17B to the workmen as directed by the learned Single Judge. The provision has been enacted with the object of mitigating the hardships caused to the workmen by the delay in implementing orders of reinstatement passed in their favour for the reason that such orders are subjected to challenge before the higher courts. We notice that the petition under Section 17B in this case had been pending from 2012 onwards. Therefore, the learned Single Judge was fully justified in ordering payment of wages, with arrears in the present case. W.A 394/2016 6 For the above reasons, we decline interference with the order of the learned Single Judge. This writ appeal is accordingly dismissed directing the appellants to pay 50% of the arrears of back wages ordered by the learned Single Judge within a period of two weeks from today and to pay the balance amount within a period of one month thereafter. Sd/K. SURENDRA MOHAN Judge Sd/P.V.ASHA Judge jj /True copy/ W.A 394/2016 7