Libertatem Magazine

Karnataka High Court Refrains From Deciding the Validity of Order Passed by Single Judge in Mysore Lamp Works Case

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A public sector company was closed down by the State Government in 2002. The workmen appealed against it and the company was made to re-operate again. The State Government was asked to absorb the employees of this company in other public sector companies and the wages due ought to be paid to them subject to the decision in the instant case. 

Facts of the Case

The company Mysore Lamp Works was a public sector undertaking. In 1993-94, the company started incurring losses. In December 1996, the Company got registered with Board of Industries and Financial Reconstruction (BIFR). A rehabilitation proposal of the company submitted to the BIFR was rejected and on 18.07.2000, the Order of winding up of the company was passed by the BIFR. The same was appealed against before the Appellate Authority for Industrial and Financial Reconstruction. However, the Appellate Authority confirmed the decision of BIFR. Subsequently, the company was closed down in 2002 and an order to that effect was passed by the Labour Department under Section 25-O of the Industrial Disputes Act, 1947. This Order was further challenged before the learned Single Judge who allowed the petition. The matter was remitted to the State Government for fresh consideration of the application under Section 25-O of the Act after affording reasonable opportunity to the workmen of the company to put forth their case. 

While this suit was still sub-judice, the bench issued an order in 2016 that the M/s Mysore Minerals Ltd. should convene a meeting of Board of Directors as per decision dated 07.12.2006 for the absorption of the workmen within two weeks. The Order further directed to identify the places where the services of the workmen of the company we’re to be absorbed in M/s Mysore Minerals Ltd. and the details were to be produced in the next hearing. Further, the workmen should be paid a sum of Rs.1,25,000/- The same was paid to identified workmen. 

Thereafter in 2020, a bench issued another Order directing Karnataka Minerals to make ad hoc payment of Rs.15,000/- per month to the workmen for the past three years within a period of four weeks. However, this payment was made subject to the result of the appeal and the Orders that may be passed on the merger by the appropriate government and also subject to the future adjustment that could be made.

Arguments Before the Court

The counsel for the workmen of the company submitted that pursuant to the order in 2020, the company had filed a memo along with the report of the Task Force (constituted to arrive at appropriate notional pay fixation and arrears of the workmen of the company). The recommendations in the report were made favouring the workmen, however, they were yet to be implemented.
The counsel further submitted that the Committee failed to consider the past services rendered by the workmen in the company and the issue with relating fitment, pay scale and promotion and seniority as well as consequential benefits. In this connection, a statement of revised wages from 1994 to 2019 as per the settlement between the Management and the Workers Union in respect of Mysore Electrical Industries, Karnataka Soaps and Detergents Ltd. was cited. The counsel contended that the workmen of Mysore Lamp Works be entitled to the same wages. Reliance was placed upon B.K.Mohapatra Vs. State Of Orissa & Anr and S.M.Pandit And Ors. among others. 

The counsel representing the State Government submitted that regardless of the Order passed in 2020, the validity of the Order needed to be adjudicated to ascertain the date of closure of the company. The counsel also argued that provisions under Section 25-O did not contemplate recording of evidence. In the instant case, neither the workmen had adduced any evidence in its case nor had sought for an opportunity to cross-examine the witnesses. Thus, the single Judge erred when she/he set aside the Order of closure on the ground that the workmen were not afforded an opportunity of cross-examination. Reliance was placed upon Britannia Industries Ltd. Vs. Maharashtra General Kamgar Union & Anr. 

The counsel also noted that the recommendations made by the Task Force would be implemented and the amount due to the workmen would be given in 3 months. The counsel further submitted that the 127 workers had already been absorbed. It was further argued that the Supreme Court has laid down the principles with regard to retrenchment with regard to Section 25-FF of the Act and the workmen are either entitled to compensation or absorption. 

Court’s Observations

The Court observed that it was unnecessary to adjudicate the validity of the Order as the issue with regard to the validity of the Order of closure has been rendered academic. It is because the State Government permitted the company to be in existence and had converted the same as 100% Government Company.

The Court also noted grievance of the workmen with regard to their fitment, fixation of pay scales and grant of consequential benefits could not be gone into in this appeal as the same required adjudication of the facts, which could be done in an appropriate forum.

The Court placed on record that the recommendations made by the Task Force Committee should be given effect within three months and the payment should be paid to the workmen within a period of three months within 3 months’ time.

Court’s Decision

The Court disposed of the Writ Petition. 

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