1. Rule, returnable forthwith. Sri R.J Kochar waives service for respondent 1. As regards respondent 2 service is dispensed with being formal party. By consent writ petition is heard finally at his stage.
2. Petitioner 1, Group Pharmaceuticals, Ltd., is a public limited company incorporated under the Companies Act, 1956, hereinafter referred to as “the company.” Petitioner 1 has its registered office at S.V Road, Goregaon (West), Mumbai. The second petitioner R.S Attavar, is the Managing Director of the company. On October 6, 1980, the first respondent-Blossom Gobinho, hereinafter referred to as “the employee made an application for employment as receptionist-cum-typist to the company and pursuant to the said application and interview, the employee was appointed as receptionist-cum-typist in the company on the terms and conditions mentioned therein, more particularly the appointment was to be effective from October 16, 1980, and she was to be on probation for 6 months from the date of her appointment. It was made clear in the appointment order that her appointment shall be subject to such rules and regulations made by the company as were in force at the time of appointment or may be introduced by amendment or extended from time to time. During the month of May 1995, the Board of Directors of the employer company unanimously resolved to shift the entire Marketing Division to Bangalore in order to give major thrust to the promotional activities of the employer company's products in Southern States and to embark on expansion of field operations in the Southern States. A letter, dated May 15, 1995, was issued by the employer company to the employee advising her to report for duty at Bangalore at the address given in the said letter since the Marketing Division was shifted from Mumbai to Bangalore. The employee was advised to report for duty at Bangalore within 15 days from the receipt of the said letter.
3. The employee challanged the action of the employer company by filing the complaint for unfair labour practice on the part of the employer company under items (3), (9) and (10) of Sch. IV of the Maharashtra Recognition of Trade Unions and Prevention of Unfair Labour Practices Act, 1971 (for short MRTU & PULP Act). It was inter alia averred by the employee in the complaint that after joining her duty as receptionist-cum-typist pursuant to the appointment letter, dated October 23, 1980, she came to be promoted to various posts by the employer company and at the time of filing of the complaint she was working as a Secretary to General Manager (Sales). It was also averred that in the year 1990 Sri R.S Attavar, the second petitioner herein called her on Saturday for work and at that time she was the only person in the office Sri. Attavar. Sri Attavar misbehaved with her and attempted to molest her. The employee lose temper and told Attavar that if he acted any further, she would inform the entire office and also his family. During the said incidence, according to the employee, Sri. Attavar, who is presently Managing Director, got very much annoyed and systematically sought to take revenge against her and under the garb of shifting of the Marketing Division, sought to transfer the employee mala fide and in colorable exercise of his power to Bangalore. The employee alleges that after the said incident the employees who were junior to her were promoted and gave higher posts by the employer company and its Managing Director, but though she was senior she was made junior to those persons who were promoted subsequently and the entire exercise was intended to humiliate and victimize her. It is further the case of the employee that the transfer was bad in law being in violation of the terms of contract and, therefore, the employer company has also indulged in unfair labour practice under item (9) of Sch. IV of MRTU & PULP Act. The transfer order was sought to be challanged on the ground that such order amounted to change of the service conditions without notice and, therefore, in the absence of any notice under S. 9-A of the Industrial Disputes Act, it was bad in law.
4. The complaint filed by the employee was strongly opposed by the employer company and its Managing Director by filing objections and written submissions. It was inter alia pleaded in defence by the employer company that the employee was not transferred but necessity of her joining duties at Bangalore has arisen in view of the unanimous decision taken by the Board of Directors of the company in the month of May 1995, to shift the entire Marketing Division to Bangalore. Since the employee was attached to the General Manager (Sales), a part of Marketing Division, the employee was advised to report for duties at Bangalore. The employer company denied that such an order of advising the employee to join her duties at Bangalore was a mala fide transfer or in colorable exercise of the employer company or that such order was in contravention of the terms of the contract, settlement of law or that it amounted to change of conditions of service. It was thus submitted that the employer company has not indulged in any unfair labour practice under any of the items under Sch. IV of the MRTU & PULP Act and the complaint was wholly misconceived, frivolous, unfounded, untenable and incompetent.
5. The parties led oral as well as documentary evidence. However, Sri. R.S Attavar did not enter into the witness box nor he examined himself. After hearing the learned counsel for the parties, the Industrial Court by the impugned order, dated June 23, 1997, held that the employee has proved that her transfer from Mumbai to Bangalore was mala fide under the guise of management policy. The Industrial Court also held that the transfer of the employee was in violation of the contractual agreement, i.e, the appointment order, dated October 23, 1980, and by transferring the employee from Mumbai to Bangalore the employer company failed to implement the agreement of service and committed unfair labour practice under item (9) of Sch. IV of MRTU & PULP Act. Though the Industrial Court held that there was no case of breach of S. 9-A of the Industrial Disputes Act, yet since the transfer was mala fide under the guise of management policy and the employer company also failed to implement the agreement of service, the employer company and its Managing Director indulged themselves in unfair labour practice and accordingly declared that they had no right to transfer the employee from the present place of work from Mumbai to Bangalore. The employer company and its Managing Director were accordingly directed to withdraw the order, dated May 15, 1995, and allow the employee to resume her duties at the administrative office at Mumbai.
6. Sri Cama, the learned senior counsel appearing for the employer company, and its Managing Director, the petitioners herein, strenuously urged that the finding recorded by the Industrial Court that the order whereby the employee was directed to join her duties at Bangalore pursuant to shifting of Marketing Division of the employer company from Mumbai to Bangalore, was a transfer made mala fide under the guise of management policy. He submitted that the alleged incident of 1990 on which much reliance has been placed by the Industrial Court in holding the transfer order mala fide, has no nexus whatsoever to the order, dated May 15, 1995, which came to be passed by the employer company rather necessitated in view of shifting of the entire Marketing Division from Mumbai to Bangalore. Sri Cama, the learned senior counsel also urged that there is inherent and fundamental right of every employer to start business and to organise and/or reorganise the same acoording to his needs and requirements and there is no obligation at law upon any employer to run his business only at a particular place. No employee can insist that such an employer must carry on business at the place where the employee originally joined or where he was located at the date the employer decided to shift the place of business. Thus he submitted that there was no breach under item (9) of Sch. IV and, there was no failure on the part of the employer company in implementation of the contract of employment. He also urged that if the employer company decided to shift his business the company has one of the three obligations to fulfill:
(i) If it closes the business and then restarts elsewhere it must pay closure compensation and terminate its workmen.
(ii) If it shifts without giving an opportunity to its workmen to also work at the relocated site then, it must retrench the workmen and pay retrenchment compensation.
(iii) If the employer relocates the place of his business and offers to relocate his employees at the new site without change in conditions of service then, he need not, either close down nor is there any obligation upon him to retrench the workmen.
In this case however, there is no compulsion on the employee to go to the new location. In all such cases the movement of the employee is voluntary. If the employee accepts this offer and proceeds to the new site there is continuity of service on the same conditions as provided at the original site. Since this shifting of the employee is voluntary no question arise of any violation of his/her condition of service. Sri Cama also urged that in case the employee does not desire to go to the point of relocation then the employment comes to an end, but significantly this is, not because the employer has terminated his or her services, but because the employee refused to go and thus suo motu relinquished his or her employment by way of resignation or voluntary retirement and in case the workman does not choose to join work at the relocated site no Court or Tribunal can compel the management to retain him in its employment at the original place where the post is no longer available. Similarly, according to him, no Court or Tribunal can direct the employer to transfer the employee to any other department or establishment of the employer since no employee has any lien to any post other than the one to which he is appointed. He also submitted that shifting of all the employees pursuant to the shifting of the establishment or a distinct part thereof does not amount to transfer of the employees. According to him S. 9-A of the Industrial Disputes Act was clearly not applicable. In support of his contentions. Sri Cama relied upon Sri Parry and Co. Ltd. v. P.C Pal, Judge of the Second Industrial Tribunal, Calcutta, [A.I.R 1970 S.C 1334]. Apex Marketing Federation Employees Union v. S.A Patil, [1988 (1) L.L.N 236] and Hindustan Lever Employees' Union v. State of Maharashtra, [1994 (2) L.L.N 912].
7. The contentions raised by the learned counsel for the petitioners have been vehemently opposed by Sri R.J Kochar, the learned counsel appearing for the employee. He supported the reasons given by the Industrial Court in the impugned order and submitted that in the appointment order there are no terms and conditions that the employee's services were liable to be transferred anywhere from the present place of the organisation. At the time of her joining the duties there was no other branch/undertaking/establishment owned by the employer company. There is no service condition of transferability of the employee from her place of appointment in the present organisation and thus there is no power vested in the employer company, express or implied, transferring the employee from the present place of business in Mumbai to Bangalore. Sri Kochar submitted that the contention the learned Counsel for the employer company and its managing director that the purported order of transfer is not transfer, but an order necessitated because the Marketing Division of the organisation was shifted to Bangalore, cannot be accepted since upon shifting of the Marketing Division, the employer company has no power to transfer the employee since under the terms and conditions of the employment there is no such power. Sri Kochar, thus submitted that the present act of the employer company and its managing director to transfer the employee from Mumbai to Bangalore is clearly an unfair labour practice under item (9) of Sch. IV of the MRTU & PULP Act. Supporting the findings recorded by the Industrial Court that the order of transfer was a mala fide order under the guise of management policy, Sri Kochar urged that the purported order of transfer is a result of the employee not yielding to the ill desire of Sri Attavar, the Managing Director of the employer company. It is the specific allegation of the employee that in November, 1990 Sri Attavar molested her and since she protested and left the office, he determined to victimize her. The chain of events that has taken place thereafter unmistakably lead to the conclusion that the order of transfer was a result of the employee not yielding to the ill desire of Sri Attavar, the Managing Director of the employee company. In support of his contentions, Sri Kochar relied upon the decision of the Apex Court in Sri Kundan Sugar Mills v. Ziyauddin, [A.I.R 1960 S.C 650], Nippani Urban Co-operative Bank, Ltd. v. Their workmen, [1992 (2) L.L.N 147], Obeetee Pvt. Ltd. v. State of Uttar Pradesh, [1986 (1) L.L.N 564], Joseph v. Mathruboomi Printing and Private Co. Ltd., [1990 II C.L.R 75] and Jasbir Singh v. Food Corporation of India, [1991 (62) F.L.R 489].
8. The Industrial Court held that the employee has been transferred mala fide from Mumbai to Bangalore under the guise of management policy. The said conclusion has been apparently reached by the Industrial Court by principally relying upon the facts:
(i) That in the month of November, 1990, the Managing Director of the employer company molested her and the employee did not yield to the ill desire of Sri Attavar, the Managing Director of the Company, and the Industrial Court observed that the allegations made in the complaint as well as in the deposition of the employee have not been rebutted by Sri Attavar by producing himself in witness box.
(ii) The Managing Director Sri Attavar in view of the aforesaid incident started victimizing the employee and after the incident of 1990 the less qualified juniors to the employee got promotion and the employee was not only not promoted but was also asked to report to her juniors who were given promotion.
(iii) The employee in the year 1991 was transferred to the Administrative Department, which was part of Marketing Division with a view that in future considering the market trade there might be possibility of shifting the marketing division and thereby the employee could be transferred.
The entire exercise thus was preplanned, according to the Industrial Court.
9. It is very difficult to appreciate the reasoning of the Industrial Court on this aspect of the matter. Admittedly, the alleged incident is said to have taken place in the year 1990 and the employee has been sought to be transferred by the order, dated May 15, 1995. The incident of transfer, therefore, cannot be reasonably connected with the alleged incident of the year 1990 nor can it be said that the said order of transfer has any nexus with the incident alleged to have taken place in the year 1990. There is no dispute that in the month of May 1995, the Board of Directors unanimously decided to shift the entire marketing division from Mumbai to Bangalore. There is also no dispute that at the time the decision was taken for shifting the Marketing Federation from Mumbai to Bangalore the employee was attached and working as Secretary to the General Manager (Sales). There is also no dispute that all similarly placed employees who were working in the Marketing Division at Mumbai were given similar orders of transfer and were advised to report for duty at Bangalore within 15 days from the receipt of the order. In this background it cannot be said that the order of transfer, dated May 15, 1995, is mala fide or was a result of the incident allegedly having taken place in the month of November 1990. The Industrial Court went too far and drew an inference of malice which does not flow naturally from the aforesaid facts. I do not intend to go into the question whether in the absence of any report of the incident during the entire period of 5 years, the deposition of the employee in that regard was reliable or not, because Sri Attavar, the Managing Director, did not choose to enter witness box and stand himself to cross examination relating to the incident. However, assuming that such incident took place in the month of November 1990, the transfer order which is sequel as a matter of fact to the shifting of the entire Marketing Division from Mumbai to Bangalore, cannot be said to be mala fide exercise of power. The finding, therefore, given by the Industrial Court on Issue 1 cannot be sustained, and it cannot be said that the employee was able to establish unfair labour practice of the employer company under item (3) of Sch. IV of MRTU & PULP Act.
10. However, the aforesaid finding may not have any effect ultimately on the outcome of the case, because in my view, the Industrial Court rightly held that by the impugned order, dated May 15, 1995, transferring the employee from Mumbai to Bangalore, the employer company and its Managing Director have indulged in unfair labour practice under item (9) of Sch. IV of MRTU & PULP Act. The Industrial Court held and in my view rightly that in the absence of any rules and regulations, the contractual agreement between the employer company and the employee has to be seen. The contractual agreement, dated October 23, 1980, is silent about employees transfer. At the time the employee joined the service there was no stipulation in the contract that she was liable to be transferred from one place to the another in the employer company. As a matter of fact at the time the employee joined the services in the employer company the entire organisation was located at Mumbai and the employer company had neither any branch nor any sort of office anywhere in the country except in Mumbai. The action of the employer company and its Managing Director for advising the employee to join her duties at Bangalore within 15 days from the receipt of the letter, dated May 15, 1995, is definitely contrary to the contract of service and is a clear violation thereof. There is neither any inherent right of transfer in the employer nor in the absence of any express provision of transfer either under the rules and Regulations or under the conditions of service, implied right or power of transfer can be traced in the employer.
11. In Kundan Sugar Mills case the Apex Court held thus:
“None of these cases holds, as it is suggested by the learned counsel for the appellant, that every employer has the inherent right to transfer his employee to another place where he chooses to start a business subsequent to the date of employment, we, therefore, hold that it was not a condition of service of employment of the respondents either express or implied that employer has the right to transfer them to a new concern started by him subsequent to the date of their employment.”
12. The observations made by the Apex Court in Kundan Sugar Mills (vide supra), came up for consideration before the Division Bench of the Karnataka High Court in Management of Nipani Urban Cooperative Bank, Ltd. The facts in Nipani Urban Co-operative Bank were at the time the concerned two workmen were employed by the bank, the bank was functioning as a bank only at Nipani. It had no branch whatever, subsequently a branch was opened at Benadi and on December 29, 1978, the concerned two workmen were transferred to work in Benadi branch with effect from 1st January, 1980. The concerned workmen did not attend their duties at Benadi and raised industrial dispute and the question was whether in the absence of an agreement which permitted transfer of the concerned workmen the bank had power to transfer them to work in the Benadi branch. The Division Bench comprising of Chief Justice Sri Bharucha (as he then was) and Justice Sri Shivashankar Bhat relying upon the judgment of the Apex Court in Kundan Sugar Mills held that the bank had no power to transfer the concerned workmen from Nipani to Benadi since the contract of service did not contain any express power of transfer, and no such power can be implied. The ratio of the case is succinctly explained in the headnote of the report which reads thus:
“It is relevant to note that at the time when the said workmen were employed by the appellant, the appellant had only one office at Nipani and no branch. It is nobody's case that at the time when the said workmen were employed the appellant intended to branch out or that, in any event, the workmen were told that there was a possibility of such branching out and of their transfer in such contingency. The said workmen when employed, would have agreed to serve only in the Nipani office then in existence and the appellant would have employed them only in respect of that office. There is, here no contract of service that contains an express power of transfer. Upon the facts no such power can be implied.”
13. The facts in hand are quite close and nearer to the case decided by the Division Bench of the Karnataka High Court in the Management of Nipani Urban Co-operative Bank Ltd. In the present case also at the time the employee joined her service the employer company and its entre organisation was functioning at Mumbai. The employer company neither had any branch nor any office outside Mumbai. It is also not the case of the employer company that at the time when the employee was appointed in the year 1980 there was any contemplation or intention to have its branch or office or any dvision outside Mumbai nor the employee Was informed at the time she joined her duties that there was possibility of any division of the organisation being shifted outside Mumbai and that the transfer could be made in such contingency. Had all these facts known to the employee she might or might not have joined her services with the employer company. She would have agreed to serve the employer company only at Mumbai then in existence and no other place. Admittedly the appointment order clearly shows that she was appointed in the organisation and not in any of the branches or divisions. Even though at the time of issuance of the order, dated May 15, 1995, the employee was working and attached to the General Manager (Sales), part of Marketing Division of the employer company, it cannot be said that the employee was in the employment with Marketing Division. As a matter of fact the employee was employee of the organisation i.e, the employer company and in the year 1991 she was put in common pool stenographers. In this view of the matter the present case is clearly covered by the judgment of the Division Bench of the Karnataka High Court and in the facts of the present case I am persuaded to take the same view as has been taken by the Karnataka High Court that in the absence of any express division of transfer in the contract of service of the employee, the employer company cannot be impliedly held to have power of transfer and, therefore, by transferring the employee from Mumbai to Bangalore, the employer company and its Managing Director have indulged in unfair labour practice under item (9) of Sch. IV of the MRTU & PULP Act since it failed to implement the agreement of service.
14. By relying upon the decision of Parry & Co. Ltd., learned counsel for the employer company and its Managing Director sought to urge that it is within the managerial discretion of the employer to Organise and arrange his business in the manner he considered best. So long as that is done bona fide it is not competent for a tribunal to question its propriety, and if a scheme for which reorganization results in surplusage of employees no employer is expected to carry the burden of such economic deadweight and retrenchment has to be accepted as inevitable, however unfortunate it is. I am afraid the observations made by the Apex Court have no application in the present case. The decision of the employer for shifting the Marketing Division from Mumbai to Bangalore may be bona fide and is bona fide, but by such decision of shifting the Marketing Division from Mumbai to Bangalore, the Employee cannot be compelled to join her duties outside Mumbai which is not contemplated under her contract of service. Similarly, the judgment relied upon by Sri. Cama, the learned senior counsel for the Petitioners in Apex Marketing Federation Employees Union has no application and can be of no help to the petitioners. In Apex Marketing Federation Employees Union, the State Government took decision to shift the Head Office of the Maharashtra State Co-operative Cotton Growers Marketing Federation, Ltd., from Mumbai to Nagpur and excepting few departments, the Federation was asked to shift the other departments. Apex Marketing Federation Employees Union filed a complaint in the Industrial Court and their ground of challenge was that there was a settlement between the union and the federation wherein there was a term that clerical staff working in Mumbai and Thane will not be transferred outside except on promotion or by way of punishment and, therefore, shifting from Mumbai to Nagpur was unfair labour practice.
15. Paragraph 5 of the said judgment reads thus:
“5. Dr. Kulkarni then urged that the decision taken by the Government is in total violation of the agreement or settlement between the petitioners on the one hand and the second respondents and the State Government on the other. In particular, he drew my attention to item (ii) of the agreement which reads thus:
“The clerical staff working in the three regions would be transferred only within the area of their respective regions. The clerical staff working in Bombay and Thane would not be transferred outside except on promotion or by way of punishment. “Relying upon this, Dr. Kulkarni urged that so long as agreement stands, the respondents have no right to issue any directions inconsistent with the agreement. Such direction, if issued is illegal and void. This agreement must override any unilateral decision taken by the respondent. In support of this submission Dr. Kulkarni relied upon the judgment of the Division Bench of this Court in Kamani Tubes, Ltd. v. Kamani Employees Union, [1987 (2) L.L.N 746]. I have gone through the judgment and in my opinion the ratio laid down therein is wholly inapplicable in as much as the reported judgment is clearly distinguishable Dr. Kulkarni also drew my attention to other judgments, viz. (r) Apar (Pvt.) Ltd. v. S.R Samant, [1980 — II L.L.J 344], and (ii) Unreported judgment in Writ Petition No. 5364 of 1986 (Apex Marketing Federation Employees Union v. Maharashtra State Co-operative Cotton Growers Marketing Federation, Ltd.), dated November 18, 1987, by Dharmadhikari and Puranik, JJ. Both these judgments are again on different issues and law laid down therein does not apply to the present case. There is nothing in the settlement/agreement which prohibits respondents 2 and 3 from shifting the head office. The Government has got power and in exercise of the said power, the Government has decided to shift the head office. In my opinion, the agreement does not take away the right of the Government to shift the head office. There is thus no substance in the contention raised by Sri Kulkarni.”
16. A look at the said discussion will indicate that this Court held that the settlement/agreement did not prohibit the federation restraining it from shifting the head office and the Government had power and in exercise of the said power the Government decided to shift the head office and, therefore, no force was found in the contention of the advocate for the Federation employees union. In the present case admittedly there are no rules or regulations which empower the employer company to transfer the employee from one place to other. There is no express term in the contract of service empowering the employer company to transfer the services of the employee from Mumbai to Bangalore. No such implied power can be held as has been held by the Apex Court in Kundan Sugar Mills and the Division Bench of the Karnataka High Court in Management of Nipani Urban Co-operative Bank Ltd.
17. The contentions raised by Sri. Cama that consequent upon the shifting of the Marketing Federation from Mumbai to Bangalore either the employee is liable for closure compen sation or terminate her services or it may retrench the employee and pay retrenchment compensation, are absolutely irrelevant for the present purpose, because the only question raised in the complaint and also before me is whether by advising the employee to join her duties at Bangalore she has been transferred from Mumbai to Bangalore and the said action was unfair labour practice under item (9) of Sch. IV of the MRTU & PULP Act or not. Therefore, the contentions as urged by the learned Counsel for the employer company and its Managing Director have no relevance. Sri Cama wants to urge that by the communication, dated May 15, 199.5, the employee has already been given offer to join her duties at Bangalore and it is her choice whether to join her duties at Bangalore or not, but there is no compulsion on the part of the employer company. It is very difficult to appreciate the contention of the learned counsel for the petitioners. By the communication, dated May 15, 1995, the employee has been advised to join her duties at Bangalore within 15 days from the receipt thereof and that obviously means that the employee has been transferred from Mumbai to Bangalore. It is not the form of communication which is material, but the substance of the communication which is decisive and the substance of the communication is that the employee has been asked to join her duties from Mumbai to Bangalore and that is nothing but a transfer from Mumbai to Bangalore. Thereby the employer company and its Managing Director have violated the terms of the contract of the service of the employee and failed to honour the contract and thereby indulge in unfair labour practice under item (9) of Sch. IV of MRTU & PULP Act.
18. Since the employer company and its Managing Director have indulged in unfair labour practice under item (9) of Sch. IV of MRTU & PULP Act and held to be so by the Industrial Court, no case for interference is made out in the impugned order though I have held that the said transfer order cannot be said to be mala fide.
19. In view of the discussion aforesaid, the Writ Petition has no merit and is dismissed with no order as to costs. Rule is discharged. Office is directed to send back the record and proceedings to the concerned Industrial Court immediately.
20. At this stage Sri Karkera, appearing on behalf of the petitioners prays for stay of the order for four weeks. For the reasons aforestated I do not find this a fit case to grant any stay of the order. Hence, oral prayer for stay is rejected. Certified copy expedited.