Modistone, Ltd. v. Deputy Commissioner Of Labour

1. Rule.

2. Learned counsel for the respondents waive service By consent rule taken up for final hearing.

3. This is a writ petition under Art. 226 of the Constitution of India directed against an order, dated March 5, 1999, passed by the Controlling Authority made under the Payment of Gratuity Act, 1972, and also the appellate order, dated May 11, 1999, passed by the Appellate Authority under the said Act hereinafter referred to as the Act.

4. The only contention raised in this petition by the petitioners is that the petitioner-company has been declared as a sick unit under S. 22 of the Sick Industrial Companies (Special Provisions) Act, 1985, and by virtue of S. 22 no recovery could be made in respect of the gratuity payable to the concerned employee.

5. The present proceedings are in respect or gratuity payable to respondents 3 to 41 who are ex-employees of the petitioner. On hearing the learned counsel I am of the opinion that this contention should be rejected. This very argument was canvassed before the learned Single Judge of this Court in Baburao P. Tawade v. Hes, Ltd., Bombay, reported in 1995 (2) L.L.N 96. The learned Single Judge after making a reference to the case of Modi Industries [1993 (2) L.L.N 548], has observed as under, in Para 11, at pages 103 and 104.

“Reliance is placed on the observation in the aforesaid case of Modi Industries (vide supra), to the effect that the Parliament could never have intended that the industrial unit under the garb of sickness or for any like difficulty may be allowed to shirk its liability to pay the wages to its workers for the work they have done … if such a position is allowed to prevail, the sick company could defeat the legitimate claims of workmen for their wages and other dues by not paying them in the first instance, forcing the workers to resort to their remedies … and then pleading the bar in S. 22(1) … No construction can be put upon the provisions of S. 22 which could result in a situation of exploitation of human beings, contrary to provisions of our constitutional directives. It is therefore not possible to accept the contention that the payment of earned wages to the workmen (it cannot be disputed that payment under settlement would be ‘wages’ within the meaning of S. 2(rr) of Industrial Disputes Act) was intended to be defeated by invoking the bar under S. 22(1) or to drive the workmen to run to New Delhi for seeking the consent of the BIFR, every time their monthly wages were required to be paid … the bar in S. 22(1) of SICA must be held to apply only to such proceedings which are not required for the day-to-day running of the sick industrial company, even under a sanctioned scheme or otherwise. Any other interpretation would lead to a ludicrous and unintended result.”

6. In Modi Industries case [1993 (2) L.L.N 548] (vide supra), the learned Single Judge of Allahabad High Court has observed, m Para. 14, at page 553:

“In my opinion, the purpose and object of S. 22 cannot be to cover those proceedings or actions which are necessary for running the industry irrespective of the fact whether it is sick or non-sick. If the industry cannot run without workers the workers also cannot expect to work without payment of their wages. The timely payment of the wages for which the provisions of the Act of 1978 have been enacted would thus be a step helping rehabilitation and it cannot be said that it creates any obstacles m fulfilling the object for which the Act of 1985 has been enacted. Both the Acts are thus complimentary to each other…”

7. In National Textile Corporation (South Maharashtra), Ltd. v. B.N Jalgaonkar reported in 1998 (4) L.L.N 537, Rebellow, J., held that the language of S. 22 in no way would stand in the way of workers making recovery of wages much in the same way as recovery of tax by the Government as has been laid down by the Apex Court in the case of Deputy Commercial Tax Officer v. Corromandal Pharmaceuticals reported in JT 1997 (3) SC 660.

8. The decision in Baburao P. Tawade case [1995 (2) L.L.N 96] (vide supra), was approved in the case of Girni Kamgar Sangharsha Samiti v. Khatau Mackanji Spinning and Weaving Company, Ltd., in 1998 (3) L.L.N 166. The special leave petition filed against the same was rejected by the Supreme Court.

9. Thus it is a settled law that it is not open for the company to take shelter of S. 22 in respect of the workers' wages and other dues. A feeble attempt was made by Sri Vasudeo to distinguish the above judgment by contending that the present case relates to payment of gratuity to the workmen and since such claim is in the nature of arrears, the case would be governed by the decision of the Apex Court in Tata Davy, Ltd. v. State of Orissa [(1997) 6 S.C.C 669]. I am unable to accept the submission made by the learned counsel for the petitioners. By no stretch of imagination gratuity can be called arrears of wages. The basic minimum which the workman is entitled to get is the wages and gratuity and other statutory benefits.

10. In the result petition is dismissed. No order as to costs.