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Shiv Kumar And Others v. State Of Haryana And Others
Factual and Procedural Background
Respondent No. 3, M/s D.H. Woodhead Ltd., sought permission under Section 25-N of the Industrial Disputes Act, 1947 to retrench 79 workmen. After discussions between management and certain union representatives, the specified authority granted permission to retrench 58 workmen. Twenty-one of those workmen (the present appellants) challenged the permission before the High Court, alleging procedural irregularities and collusion between union leaders and management. The High Court dismissed their petition. The workmen then invoked the Supreme Court’s jurisdiction under Article 136 of the Constitution. During the pendency of the Special Leave Petition, Shiv Kumar—one of the original petitioners—settled with the management; an interlocutory application (IA No. 3 of 1994) was allowed, confining the appeal to the 21 remaining workmen.
Legal Issues Presented
- Whether the permission granted under Section 25-N was vitiated because the workmen were not individually served with copies of the employer’s application as mandated by Section 25-N read with Rule 76-A of the Industrial Disputes Rules, 1957.
- Whether the alleged collusion between union representatives and management invalidated the settlement relied upon by the specified authority.
Arguments of the Parties
Appellants’ Arguments
- The union leaders had colluded with the management; therefore, the settlement on which the specified authority relied was invalid.
- The workmen were not personally served with copies of the employer’s application, contravening Section 25-N and Rule 76-A.
Respondent-Management’s Arguments
- Notices were dispatched to every workman under postal certificates, and proof of service was placed before the specified authority.
- The settlement was bona fide and had been accepted by duly authorised representatives of the workmen.
Table of Precedents Cited
No precedents were cited in the provided opinion.
Court’s Reasoning and Analysis
The Supreme Court focused on procedural compliance with Section 25-N and Rule 76-A, which require that:
- An application for permission to retrench must be filed in triplicate.
- Copies must be served on the concerned workmen.
- “Proof” of such service must accompany the application.
The management produced postal certificates dated 26-12-1992 to show that notices had been sent. The Court found these certificates insufficient, observing that such postal seals could be procured at any time. Upon examining the employer’s original application (Annexure A), the Court noted that it contained no reference to proof of service on the workmen, contrary to Rule 76-A(2). The mere assertion in the counter-affidavit that proof was submitted did not satisfy the Court. Because personal service on the workmen was not adequately demonstrated, the Court held that the specified authority’s permission to retrench the 21 appellants was not in accordance with law.
Regarding the allegation of collusion, the Court remarked that when collusion is alleged, reliance on the representatives’ actions cannot be considered safe; however, its ultimate decision turned on the absence of proper service, rendering it unnecessary to rule definitively on collusion.
Holding and Implications
Holding: The appeal is allowed. The permission to retrench the 21 appellant-workmen is set aside. Instead of ordering reinstatement, the Court directs the employer to pay each appellant the statutory retrenchment compensation under Section 25-F(b) plus an additional Rs 10,000. Any retrenchment compensation or payments already received are to be deducted. The net amount must be remitted to each workman within two months.
Implications: The decision underscores strict compliance with the notice and proof-of-service requirements of Section 25-N read with Rule 76-A. While the Court provided monetary relief rather than reinstatement on the specific facts, it signalled that permissions granted without demonstrable proof of service are vulnerable to challenge. No new substantive precedent was otherwise established.
B.L Hansaria, J.— Leave granted. Heard learned counsel for the parties.
2. This Court had been approached by filing the connected SLP by one Shiv Kumar, D.P Singh and D.H Woodhead Ltd., Employees' Union through Shiv Kumar, its Joint Secretary. An application has, however, been filed, registered as IA No. 3 of 1994, in which it has been averred that Shiv Kumar has settled the matter with the management and the workmen who are challenging the order of the High Court may be taken as those whose names have been indicated in the amended cause title — their number being 21. We allow this IA.
3. These appellants have felt aggrieved at their retrenchment pursuant to the permission given by the specified authority under Section 25-N of the Industrial Disputes Act, 1947, hereinafter the Act. The permission granted by the authority came to be challenged before the High Court. It, however, dismissed the petition. Hence this appeal under Article 136 of the Constitution.
4. What is required to be noted is that Respondent 3 M/s D.H Woodhead Ltd. approached the specified authority to seek permission to retrench 79 of its workmen. The authority granted permission to retrench 58 workmen, after the matter had come to be discussed and settled between the representatives of the management and workmen. The High Court was approached by the aforesaid Shiv Kumar and D.P Singh contending, inter alia, that the union leaders had colluded with the management, and so, the settlement arrived at was bad in the eye of law and the workmen concerned could not have been retrenched on the basis of that settlement. Another point urged was that the workmen concerned had not been personally served with the copy of the application as required by Section 25-N of the Act. The High Court did not accept either of the contentions. As to the non-service of personal notice, it observed that bald assertion in this regard could not be accepted as correct, more particularly, when their representatives had been duly heard by the specified authority. As to the hearing of the representatives, we would observe that the workmen having alleged collusion, no reliance could have been placed on that.
5. The point for examination, therefore, is whether there is material on record to show that the workmen concerned had been served with the copies of the application as required by Section 25-N read with Rule 76-A of the Industrial Rules, 1957, which was the point on which notice was ordered on 21-1-1994. In reply to this contention advanced by the workmen, what has been stated by the management in its counter-affidavit is that the notices had been sent to all workmen under postal certificates and proof of service had been submitted to the specified authority. Learned counsel appearing for the management produces before us some certificates evincing posting of some letters to the workmen concerned on 26-12-1992.
6. We have not felt safe to decide the controversy at hand on the basis of the certificates produced before us, as it is not difficult to get such postal seals at any point of time. To assure our mind that the notices had really been sent out to the workmen concerned, we perused the application which had been filed by the management seeking permission. We did so because Rule 76-A(2) requires that the application shall be made in triplicate and copies of the same shall be served by the employer on the workmen concerned and “proof to that effect shall also be submitted by the employer along with the application”. But the application (Annexure A) has not mentioned anything about “proof” of service to the workmen concerned. The statement in the counter-affidavit that proof of service had been submitted to the specified authority has not satisfied our mind in this regard.
7. The permission granted to retrench 21 appellant-workmen of the respondent-management cannot, therefore, be said to be in accordance with law. As, however, permission for retrenchment was sought for on the grounds mentioned in para 23 of the aforesaid application which the specified authority regarded as just and proper, we are of the view reinstatement would not be the proper order to be passed, and interest of justice would be met if, apart from what is due to each of the aforesaid workmen as retrenchment compensation visualised by Section 25-F(b) of the Act, a sum of Rs 10,000 is paid to each of them. From the amount which would become so due, payment if any made towards retrenchment compensation shall be deducted; so also, if any further sum had been received by any of the aforesaid workmen. The sum of money which would become ultimately payable, after the deduction(s), if any to be made, shall be remitted to each of the aforesaid workmen within a period of two months from today.
8. The appeal is allowed accordingly.
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