w w w . L a w y e r S e r v i c e s . i n



J.K. Cotton Spinning & Weaving Mills Company Ltd. v/s State of U.P. & Others

    Special Appeal No. 258 of 2015

    Decided On, 29 April 2015

    At, High Court of Judicature at Allahabad

    By, THE HONOURABLE CHIEF JUSTICE DR. DHANANJAYA YESHWANT CHANDRACHUD & THE HONOURABLE MR. JUSTICE MANOJ KUMAR GUPTA

    For the Appellant: Ritvik Upadhya, V.K. Upadhya, Advocates. For the Respondents: C.S.C., Bushra Maryam, Advocates.



Judgment Text

This special appeal has arisen from a judgment and order of a learned Single Judge dated 3 April 2015. By the judgment impugned, the learned Single Judge has set aside an order dated 31 December 2008 passed by the Additional Labour Commissioner, withdrawing recovery certificates that were issued under the U P Industrial Peace (Timely Payment of Wages) Act, 1978.

The first respondent which was engaged in the manufacturing of blended yarn and fabrics with a factory at Kanpur, declared a lock out on 15 May 1989. On 17 May 1989, the State Government issued a notification under Section 3 of the U P Industrial Disputes Act, 1947, banning the lock out. On 19 December 1990, a further notification was issued by the State Government imposing a permanent ban. On 21 June 1991, the Additional Labour Commissioner, Kanpur issued twenty two recovery certificates under Section 3 of the Act for the alleged recovery of wages due and outstanding to the workmen. The appellant filed a writ petition challenging the order banning the lock out in which an interim order was passed staying the arrest of the Directors. The appellant also filed a separate writ petition challenging the recovery certificates in which an interim order was passed on 1 November 1991, staying further proceedings for recovery in pursuance of the recovery citation.

In the meantime, the appellant had moved the Board for Industrial & Financial Reconstruction (BIFR) under the provisions of the Sick Industrial Companies (Special Provisions) Act, 1985 (SICA), resulting in the registration of its case as Case No.81/90. A scheme for the revival of the Company was sanctioned under Section 18 (4) of the SICA on 12 November 2002. The sanctioned scheme envisaged various concessions including in clause 8.03 on the part of the State Government. Under clause 8.03 (c) of the sanctioned scheme, the following concessions were envisaged on behalf of the State Government:

'(c). To withdraw, cancel, drop all cases, proceedings, attachments, show cause notices, recovery certificates/notices/citations and the ban order issued by the State Govt./Local Authorities in relation to lock out and any statutory, power or labour dues and waive all charges and penalties.'

On 4 June 2008, the BIFR issued certain directions under which it was envisaged that the Company would within a period of seven days file an affidavit stating that upon withdrawal of the ban order in regard to the lock out, the writ petition filed by the Company would be withdrawn. The Government of Uttar Pradesh was to issue a notification for the withdrawal of the ban order on the lock out of the Company within a period of further twenty one days.

On 31 December 2008, the Additional Labour Commissioner, Kanpur withdrew the recovery certificates which formed the subject matter of Writ Petition No.29764 of 1991 filed by the appellant. Following the withdrawal of the recovery certificates, the writ petition filed by the appellant was dismissed as withdrawn on 5 February 2009.

A writ petition was filed by the sixth respondent, which is a body styled as J K Cotton Mills Karmarchari Audyogik Utpadak Sahkari Samiti, Kanpur, in order to challenge the order of the Additional Labour Commissioner dated 31 December 2008. In response to the writ petition, the appellant objected to the locus of the sixth respondent. According to the submission of the appellant, a Memorandum of Understanding was entered into by the appellant with seven registered Trade Unions on 16 January 2009 in connection with the reopening of the Mill after lifting of the lock out under which the workmen, in clause 11, had agreed to forego all the dues from 15 May 1989 until they were taken back on work. The appellant filed a counter affidavit in the writ proceedings, questioning the locus and maintainability of the writ petition on the ground that the sixth respondent had no legal existence in the Mill and was neither a recognised Union of the workers nor a cooperative society registered under the U P Cooperative Societies Act, 1965. Moreover, it was submitted that before the BIFR an attempt had been made by the sixth respondent to be heard as a party and when its locus was challenged, the BIFR had directed the sixth respondent to furnish documentary evidence about its registration/recognition failing which, it was stated, the BIFR may not issue any notice to it, so as to allow it to attend future hearings. An interim direction was issued by the learned Single Judge on 18 November 2011, directing the sixth respondent to file a list of workers who are its members. The sixth respondent filed an affidavit stating that it had a representation which has been supported by at least 460 workmen. The sixth respondent, admittedly, is not a registered Trade Union nor for that matter, is it a cooperative society registered under the U P Cooperative Societies Act, 1965.

The writ petition was allowed by the learned Single Judge by the impugned judgment and order dated 3 April 2015. The learned Single Judge held that the Additional Labour Commissioner, who had performed the quasi judicial power while issuing a recovery certificate, would have no power to review his own order by issuing an order recalling the recovery certificates as he did on 31 December 2008. Insofar as the locus of the sixth respondent is concerned, the learned Single Judge has observed as follows:-

'12. So far as locus standi of petitioner is concerned, once it is not in dispute that even a single workman is member of petitioner-union and is adversely affected by the order passed by Additional Labour Commissioner withdrawing recovery certificate, petitioner-union has cause of action to spouse the cause of such member and it cannot be said that it has no locus standi whatsoever. Therefore, the objection raised on behalf of employer, I find lacks substance and has to be rejected.'

The submission which has been urged on behalf of the appellant is that the learned Single Judge by setting aside the order of the Additional Labour Commissioner failed to consider the objections of the appellant to the maintainability of the petition and to the locus of the sixth respondent. It was urged that, as a result, the scheme which has been sanctioned by the BIFR would be seriously cast in jeopardy at the behest of the sixth respondent, which is neither a registered Trade Union nor a registered cooperative society. An interim order was passed by the learned Single Judge directing the sixth respondent to file a list of members which, it was urged, was not complied and the petition was not maintainable on the basis of the reasons which have been extracted in the earlier part of the judgment. On merits, it was submitted that the Additional Labour Commissioner had not exercised the power of review in recalling the recovery certificates on 31 December 2008, but had given effect to the order passed by the BIFR since Section 32 of the SICA gives an overriding effect to a sanctioned scheme. In this regard, reliance was placed on a decision of the Supreme Court in Raheja Universal Limited v. NRC Limited & Ors. ((2012) 4 SCC 148).

On the other hand, learned counsel appearing on behalf of the sixth respondent, which is contesting these proceedings, submitted that in the writ petition which was filed by the appellant for challenging the ban on the lock out, the sixth respondent had got itself impleaded. Similarly, the sixth respondent had also got itself impleaded in the writ petition filed by the appellant challenging the order of the Additional Labour Commissioner issuing the recovery certificates. Learned counsel stated that though the sixth respondent is not a registered Trade Union nor a cooperative society, it would be legitimately entitled to pursue the interest of the workmen.

From the records of the Court, it appears that both the locus of the sixth respondent and the maintainability of the writ petition were seriously in question. The appellant had relied upon a Memorandum of Understanding which has been entered into with seven registered Unions in the establishment under which, in consideration of the workmen being taken back on duty, the Unions have given up the right to receive their dues for the period of the lock out until the workmen resume work. From the records, it also appears, as was noticed by the learned Single Judge, that even before the BIFR, the sixth respondent had been directed on 4 June 2008 to furnish documentary evidence in regard to its registration/recognition, failing which, it was observed that notice may not be issued to the sixth respondent and that it would not be permitted to attend further hearings. During the pendency of the writ petition, the learned Single Judge had directed the sixth respondent to file a list of its members. In this background, before the substantive challenge to the withdrawal of the recovery certificates could be considered, the basic issue which fell for consideration before the learned Single Judge was whether such a writ petition at the behest of the sixth respondent was maintainable and whether the sixth respondent had locus to raise the grievance.

The impugned order of the learned Single Judge proceeds on the basis that once it is not in dispute that even a single workman is a member of the sixth respondent-Union and is adversely affected by the order passed by the Additional Labour Commissioner withdrawing the recovery certificates, the Union has a cause of action to espouse the cause of such member. Who the member is has not been deduced or specified. Whether the sixth respondent has any membership at all is a matter which falls for close scrutiny since it is now not in dispute that the sixth respondent is neither a registered Trade Union nor is it a cooperative society registered under the Cooperative Societies Act, 1965.

On the other hand, as has been indicated before the Court, the ban which was imposed by the State Government on the lock out was withdrawn on 24 October 2008 with effect from the date of publication of the notification in the Official Gazette. Whether the scheme which has been sanctioned by the BIFR has been implemented and if so, to what extent, is also a matter which would warrant close analysis having due regard to the parameters of the jurisdiction of the learned Single Judge under Article 226 of the Constitution. Since all these aspects have not been enquired into by the learned Single Judge and as we have observed earlier, the finding on the locus of the sixth respondent has been confined to a brief observation in paragraph 12 of the impugned judgment without taking note of the material which has been produced on record, we are of the view that the ends of justice w

Please Login To View The Full Judgment!

ould be met if the impugned order of the learned Single Judge is set aside and the matter is remanded back to the learned Single Judge for disposal afresh. We clarify that the issue of maintainability of the petition and of the locus of the sixth respondent are kept open. For these reasons, we allow the special appeal and set aside the impugned judgment and order of the learned Single Judge dated 3 April 2015. Writ-C No.19976 of 2009 shall, accordingly, stand restored to the file of the learned Single Judge for disposal afresh. We may also clarify that by the impugned judgment and order of the learned Single Judge, the writ petition filed by the sixth respondent challenging the order passed by the BIFR on 4 June 2008 has been dismissed on the ground of the availability of an alternative remedy, leaving it open to the sixth respondent to pursue the remedy available in law under the SICA. Since that part of the order is not in question in this appeal, we clarify that the said direction would not be affected by the present judgment and order. The special appeal is, accordingly, disposed of subject to the aforesaid clarifications. There shall be no order as to costs.
O R