FICUS PAX PRIVATE LTD. & ORS. versus UNION OF INDIA & ORS. on 12 June 2020

1. All these writ petitions except one (i.e. W.P. (civil) Diary No.10981/2020) have been filed by different employers, employers’associations questioning the orders issued under Disaster ManagementAct, 2005 and other consequential orders issued by different States whereGdirections have been issued that all the employers be it in the industriesor in the shops, commercial establishment, shall make payment of wagesof their workers, at their work place, on the due date, without anydeduction, for the period their establishments are under closure duringthe lockdown.

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2. In the writ petitions apart from challenging the D.O. dated20.03.2020 issued by the Secretary, Government of India, Ministry ofLabour and Employment, order dated 29.03.2020 issued by Governmentof India, Ministry of Home affairs, in exercise of powers under Section10(2)(l) of Disaster Management Act, 2005, the vires of Section 10(2)(l)of Disaster Management Act, 2005, has also been questioned,in event,Section 10(2)(l) is interpreting as conferring power to Central Governmentto direct the private employers to make full payment of wages to theemployees during the period of lockdown. In few of the writ petitions,directions have also been sought to subsidise 70 to 80 percent of thewages for the lockdown period by utilising funds collected by EmployeeState Insurance Corporation or the PM Cares Fund or through any otherGovernment funds/schemes. To understand the nature of relief in differentwrit petitions, it shall be sufficient to refer reliefs claimed in few of thewrit petitions since in other writ petitions reliefs claimed are more or lesssimilar. In W.P.(Civil) D.No.10983/2020, Ficus Pax Limited PrivateLimited and others versus Union of India and others, the Union of Indiahad filed a common counter affidavit and prayed that the counter affidavitbe adopted in other writ petitions referred to in paragraph 4 of the counteraffidavit. W.P. (Civil) Diary No.10983/2020 is being treated as leadingwrit petition. Various interventions applications have also been filed inthe leading writ petition. The intervention applications filed in the leadingwrit petition are allowed.

3. The petitioner in W.P.(C) Diary No. 10983 of 2020 is a companyincorporated under the Companies Act and is engaged in the business ofpackaging with eleven factories spread across seven states. The petitioneris registered as Medium Industry (manufacturing) under Micro, Small,Medium Enterprises Development Act, 2006. The petitioner companybefore the lockdown employed 176 permanent workers and 939 contractworkers across all its factories, warehouses and offices. The petitioner’scase is that after the lockdown period although petitioner being in asupply chain of several essential items such as pharmaceuticals, foodproducts has been permitted to operate but its business has been reducedto the level of near 5-6 percent. The petitioner challenges the orderdated 29.03.2020 and the D.O. dated 20.03.2020 as being violative ofArticle 14, Article 19(1)(g) of the Constitution of India.

4. The petitioner’s case is that notifications are arbitrary, illegal,irrational and unreasonable and contrary to the provisions of law including AB

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AArticle 14, Article 19(1)(g). Notifications are unreasonable and arbitraryinterference with the rights of petitioner Employers under Article 19(1)(g).Notifications are also contrary to the principles of Equal work EqualPay and also No work No pay, for it does not differentiate between theworkers who are working during the lockdown period in establishmentsuch as the petitioner who have been permitted to operate during theBlockdown period and the workers who had not worked at all.

5. The Home Secretary, Ministry of Home Affairs, Governmentof India, cannot invoke Section 10(2)(l) or any other provisions of DisasterManagement Act, 2005, to impose financial obligations on the privatesector such as payment of wages. The Central Government has theCpower to allocate funds for emergency response, relief, rehabilitation,mitigation of disasters under Disaster Management Act. The ultimateonus for any compensation towards workers shall ultimately be ofGovernment and the said liability cannot be shifted upon the employersin the Private establishment. The impugned notifications have the effectDof completely negating the statutory provisions under the IndustrialDisputes Act, 1947. The respondent should not compel the employers topay the wages for lockdown period but instead should utilise the fundscollected by Employees State Insurance Corporation (ESIC) to makeperiodical payment to workers. In the writ petition, following prayer hasbeen made: -E

“PRAYER

It is therefore, most respectfully prayed that this Hon’bleCourt may graciously be pleased to: - i) Issue a writ, order or direction in the nature of aFdeclaration or certiorari or any other appropriate writ,order or directions declaring D.O. No.M-11011/08/2020-Media dated 20.03.2020 issued by Secretary (Labour& Employment) and Order No.40-3/2020-DM-I(A)dated 29.03.2020 passed by Home Secretary, MinistryGof Home Affairs are ultra vires Article 14, 19(1)(g) ofthe Constitution of India; AND/OR

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ii) Issue a writ, order or direction in the nature of mandamusor any other appropriate writ, order or directions, therebydirecting the Respondents to subsidize the wages ofworkers to the tune of 70-80% for lockdown period byH

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utilizing the funds collected by the Employees’ StateInsurance Corporation(ESIC) or the PM Cares Fund orthrough any other Government Fund/Scheme, AND/OR

iii) Pass such other order or orders as may be deemed fitand proper and just and necessary in the interest ofcomplete justice.

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AND FOR WHICH ACT OF KINDNESS OF THISHON’BLE COURT, THE PETITIONER AS IN DUTYBOUND SHALL EVER PRAY.”

6. The prayer made in W.P. (civil) No.484 of 2020, B4S solutionPrivate Ltd. and others versus Union of India & others, also need to benoted. The petitioner No.1 is a company incorporated under theCompanies Act, 1956. The company has a number of subsidiary/associatecompanies. In addition to challenging the Government Order dated29.03.2020, the petitioners have also challenged the consequential orderdated 31.03.2020 issued by the Government of Maharashtra, Order dated28.03.2020 issued by Government of Punjab, Order dated 29.03.2020issued by State of Haryana and Order dated 05.04.2020 issued byGovernment of Uttar Pradesh. In one of the prayers, petitioners haveprayed that petitioners be permitted to make payment of 50 percent ofBasic Pay plus DA to its employees, pending the final disposal of thewrit petition. Following are the prayers which have been made in thewrit petition: - C

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“PRAYER

In the facts and circumstances of the case, as mentioned above,it is, therefore, most respectfully prayed that this Hon’ble Courtmay graciously and empathically be pleased to:- F

a. Issue a Writ of Mandamus or any other appropriate writ(s),order(s) or direction(s) to quash clause iii of Government Orderdated March 29, 2020 issued by the Ministry of Home Affairs,Government of India for being unconstitutional and in violationGof Article 14 and 19 of the Constitution of India.

b. Issue a Writ of Mandamus or any other appropriate writ(s),order(s) or direction(s) to quash Government Order dated31.03.2020 issued by the Government of Maharashtra,Government Order/advisory dated 28.03.2020 issued by the H

AGovernment of Punjab, Government Order dated 29.03.2020issued by the State of Haryana, Government order dated05.04.2020 issued by the Government of Uttar Pradesh onlyto the limited extent of compelling the Petitioner and itssubsidiaries to pay full salary to all its staff, workers, contractworkers, casual workers during the period of lockdown forBbeing unconstitutional and in violation of Articles 14 and 19 ofthe Constitution of India.

c. Permit the Petitioners to make payment of 50% of basic payplus DA to its workers/employees (without payment of PF andESIC contribution as the same is not wages), pending the finalCdisposal of the present petition;

d. Waive the Provident Fund and the ESI as there has been nowork rendered by the workers during this period of lockdownand the contribution deposited by the Petitioners for the monthof March and April, 2020 may refunded;D

e. Pass any order or direction as this Hon’ble Court may deemfit and proper in the facts and circumstances of the presentpetition.”

7. W.P.(civil) D.No.10981 of 2020, Aditya Giri versus Union of EIndia& others, is a petition filed by an individual as a Public InterestLitigation to espouse the cause of employees and employers who havebeen laid off and who are on the verge of Bankruptcy due to lockdown.In the prayers which have been made in the writ petition, directionshave been sought to the respondent to frame policy to mitigate theproblems of employees of the Private Sector as well as of the employersFwho are financially not in position to maintain the employees. In the writpetition, following are the prayers which have been made: - “PRAYER

In the facts and circumstances of the case, as mentioned above,it is, therefore, most humbly prayed that this Hon’ble Court mayGgraciously be pleased to: -

a) Issue a Writ in the nature of Mandamus directing theRespondent No.1 to formulate a policy/measures to mitigatethe problems of sudden laying off of the employees of privatesector during the covid-19 lockdown period.H

b) Direct the respondents to intervene in a situation where theemployer is financially not in a position to maintain theemployees the respondents to support those employees whoare not able to maintain their families and fulfil the basic needs.

Pass any order or direction as this Hon’ble Court may deemfit and proper in the facts and circumstances of the case tomeet the ends of justice.

AND FOR THIS ACT OF KINDNESS, THE PETITIONERSHALL, AS IN THE DUTY BOUND EVER PRAY.”

8. Prayers made in one more writ petition needs to be noted i.e.W.P.(Civil) D.No.11180 of 2020, Chamber of Small IndustryAssociationsand others versus Union of India and others. Apart from challenging theorder dated 29.03.2020 issued by the Home Secretary, Ministry of HomeAffairs, and order dated 31.03.2020 issued by Government ofMaharashtra, one of the prayers made in the writ petition as prayer (v)is to the following effect: - “Issue a writ of Mandamus to pass appropriate direction to therespondent to strike a balance between the interest of MSMEsand the interest of workers and employees in a manner that neitheris unduly prejudiced “

9. As noted above, a common counter affidavit has been filed inwrit petition (civil) D.No.10983 of 2020 with prayer to adopt the counteraffidavit in other writ petitions. At the outset, in counter affidavit, it hasbeen pleaded that impugned notifications have been withdrawn by theUnion of India; hence, the Union of India is not filing a para-wise replyto the writ petition but filing a limited affidavit to bring on record -

i) legal authority, competence under which the said impugneddirection was passed;

ii) the facts and circumstances behind withdrawal of said orders,directions.

10. The Union of India has craved for leave to file a detailedpara-wise reply at subsequent stage, if required.

11. In the counter affidavit, it has been stated that all orders passedunder Section 10(2)(l) of the Disaster Management Act, 2005, havebeen withdrawn w.e.f. 18.05.2020 vide an order dated 17.05.2020.

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ACounter affidavit states that D.O.dated 20.03.2020 issued by Secretary,Ministry of Labour and Employment, to the Chief Secretaries of all theStates was an advisory and an order was issued on 29.03.2020 by NationalExecutive Committee in exercise of powers under Section 10(2)(l) ofDisaster Management Act, 2005, directing all the employers to makepayment of wages of their workers at their workplace without anyBdeduction for the period their establishments are under closure duringthe lockdown.

12. Applications for interventions have been filed by employees,different employees’ unions, namely All India Central Council of TradeUnion, Trade Union Centre of India and few other employees’Corganisations in leading writ petition. The intervenors in their applicationsand affidavits have supported the order dated 29.03.2020. It has beenstated that under Disaster Management Act, 2005, the CentralGovernment has full authority to issue such directions.

13. It is further stated that right to wages is a pre-existing rightDwhich flows inter alia from the contract of employment as well as broaderconstitutional and statutory scheme flowing from Article 14 and 21 ofthe Constitution and encompassing Payment of wages Act, MinimumWages Act, The Contract labour (Regulation and abolition) Act and theIndustrial Disputes Act, 1947. Nationwide lockdown and resultant closureEof the workplace directly affected the sustenance and livelihood ofmembers of the Employees Union. All measures taken by the Governmentof India are within its legislative competence. The prayer of the petitionerto utilise the ESIC fund has been refuted.

14. We have heard learned counsel for the petitioners.LearnedFAttorney General, Shri K.K.Venugopal, has appeared for the Union ofIndia. We have also heard learned counsel appearing for the differentintervenors.

15. Learned counsel for the petitioners contends that impugnednotifications are arbitrary, unreasonable, and contrary to the provisionsGof law including Article 14, & Article 19(1)(g) of the Constitution ofIndia. It is submitted that by way of impugned notifications an otherwisestable and solvent industrial establishment can be forced into Insolvencyand loss of control of Business.

16. The Home Secretary, Ministry of Home Affairs, cannot invokeSection 10(2)(l) or any other Section of Disaster Management Act, 2005,H

to impose financial obligations on the Private Sector. The CentralGovernment under Disaster Management Act, 2005, has the power toconstitute National Disaster Response Fund. Similarly, the State DisasterResponse Funds have been constituted, which can be utilised for paymentof any compensation towards workers which liability cannot be shiftedupon the employers in Private establishments. The respondent shouldnot compel the employers to pay the wages for the lockdown period butinstead should utilise the funds collected by Employees State InsuranceCorporation (ESIC) to make periodical payment to the workers.

17. Some of the counsel have also raised the submissions that theorder dated 29.03.2020 was issued only with regard to migrant labourand the scope of order should not be extended to cover the entireworkforce of the establishment. Further, the order dated 29.03.2020 wasnot a direction to the employer but it is an order to the State/UTGovernment and other statutory bodies to take necessary action. Theviolation of Article 14 and Article 19(1)(g) and Article 300A has alsobeen alleged by the impugned orders.

18. Learned counsel submits that if the impugned order is read inthe manner contended by the respondent, it would mean that the employershould be compelled to not only continue to retain their migrant workersbut also their regular workers and also pay full wages at a time when thebusiness is effectively closed, and there is no income. Failure to complyfor any reason, including the complete absence of funds, would renderthem liable to prosecution. Such order is ex facie arbitrary andunreasonable.

19. Learned counsel have further submitted that all industries andprivate establishments have different financial capacity, circumstancesand all establishments cannot be grouped in one category for issuing adirection to pay wages to its employees during lockdown period and inpossibility cannot be directed by any executive action. Some of thepetitioners have come forward with the prayer that they are ready topay 50 percent wages during the said period. Some of the learned counselhave also submitted that they are also negotiating with their workersregarding payment of wages during the period of lockdown and some ofthe workers have re-joined their work.

20. Shri K.K.Venugopal, learned Attorney General, submits thatthe power to issue order dated 29.03.2020 can certainly be traced tointer alia Section 10(1) and nothing under Section 10(2) restrict the ambit AB

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Aor scope of Section 10(1). The order dated 29.03.2020 was fully inconformity with the provisions, schemes of Disaster Management Act,2005.

21. The direction dated 29.03.2020 was issued in public interestby the Competent Authority. The directions are neither arbitrary norBcapricious. The ground of financial hardship, incapacity which has beenpleaded by the petitioner is legally untenable ground to challenge thedirection issued by competent authority in exercise of statutory power.The Union of India issued the above direction as a temporary measureto mitigate the financial hardship of the employees and workers especiallycontractual and casual workers during the lockdown period. The measureCwas proactively taken by the respondent to prevent perpetration offinancial crisis within the lower strata of the society, labourers andemployees. Directions issued by the Government of India where aneconomic and welfare measure as a benevolence in the object sought tobe achieved.D22. Shri Venugopal further submits that by order dated 17.05.2020,the National Executive Committee has revoked its earlier impugneddirections w.e.f. 18.05.2020, hence, the order remain in operation onlyfor 54 days. The impugned notifications have been outlift their lives, theadjudication of the same would only entail an academic exercise.E

23. Learned counsel appearing for the intervenors have supportedorders issued by the Government of India dated 29.03.2020 and otherorders and consequential directions. It is submitted that orders dated20.03.2020 and 29.03.2020 were issued in larger public interest to preventthe possible spread of the disease.F

24. It is submitted that when the authority had declared a lockdown,it is also liable to provide for the consequences of the lockdown. Inevent, the order dated 29.03.2020 struck down, the very lockdown orderwill be arbitrary and it is also liable to be struck down. The Governmentof India has offered Economic Stimulus package to all Small and MediumGIndustries to enable them to cope with the current financial situation soas to ensure that they can cope with the burden of payment of wagesand continue to be viable.

25. The Disaster Management Act, 2005, is a self-contained codeand no reliance can be placed on any other law. Further by virtue ofSection 72 of Disaster Management Act, 2005, all other enactments areH

overridden. It is further submitted that order impugned seeks to reinforcethe pre-existing right of the worker to get their wages without anyreduction. The Payment of Wages Act of 1936 has also been referred toin support of their submission.

26. We have considered the submissions of the learned counselfor the parties and perused the record.

27. It is true that the orders dated 29.03.2020 which was passedin exercise of power under Section 10(2)(l) of the Disaster ManagementAct, 2005, stood withdrawn by subsequent order dated 17.05.2020 w.e.f.18.05.2020. The consequence of the subsequent order dated 17.05.2020is that the obligation cast on the employer to make payment of wages oftheir workers at their workplace, without any reduction, for the periodtheir establishments are under closure during the lockdown is no longerin operation. However, the issue regarding obligation of the employer asper order dated 29.03.2020 when it remained in force is still to beanswered especially when the petitioners challenges the order as ultravires to Disaster Management Act, 2005, as well as violative of Article14, 19(1)(g) and Article 21. The petitioners have also prayed that Section10(2)(l) of Disaster Management Act, 2005, be declared ultra vires toArticle 14 and Article 19(1)(g),in event, it is interpreted in conferringauthority to the Central Government to direct the employers of the Privateestablishments to pay wages of their workers during the lockdown period.

28. In the common affidavit filed by Union of India, althoughauthority to issue impugned order dated 29.03.2020 has been sought tobe traced under Section 10(1) and Section 10(2)(l) of DisasterManagement Act, 2005, but in counter affidavit, there are no reply to theother grounds raised in the writ petitions to attack the order dated29.03.2020.

29. We are of the view that all issues raised by the petitioners andthe respondents have to be decided together and the piecemealconsideration is not warranted. We thus are of the view that Union ofIndia may file a detail counter affidavitfor which the leave they havealready prayed for in the common counter affidavit, within a period offour weeks. Rejoinder to which to be filed within a period of one weekand all the matter to be listed again in last week of July, 2020.

30. In some of the writ petitions, this Court had already passed anorder for not taking any coercive action against the employer. In ourorder dated 04.06.2020, we have directed: - AB

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A“In the meantime, no coercive action, against the employersshall be taken pursuant to notification dated 29.03.2020.”

The above order shall continue in all the matters.

31. We have already noticed that in one of the writ petitions, b4SSolutions Private Ltd., the petitioners have prayed for permitting theBpetitioner to make payment of 50 percent of Basic Pay plus DA to itsworkers/employees without payment of PF and ESICC pending finaldisposal of the writ petition.

32. One of the writ petitions i.e. Writ petition filed by the Chamberof Small Industry Associations, one of the prayers sought is “direction toCthe respondent to strike a balance between the interest of MSMEs andthe interest of the employees.”

33. It cannot be disputed that the lockdown measures enforcedby the Government of India under the Disaster Management Act, 2005,had equally adverse effect on the employers as well as on employees.DVarious Industries, establishments were not allowed to function duringthe said period and those allowed to function also could not function totheir capacity. There can be no denial that lockdown measures whichwere enforced by the Government of India had serious consequencesboth on employers and employees. The period of Unlock having begunEfrom 01.06.2020 and even prior to that some of the industries werepermitted to function by the Government of India by differentguidelines,most of the industries and establishments have re-opened orare re-opening, require the full workforce.

34. As noted above, all industries/establishments are of differentnature and of different capacity, including financial capacity. Some ofFthe industries and establishments may bear the financial burden of paymentof wages or substantial wages during the lockdown period to its workersand employees. Some of them may not be able to bear the entire burden.A balance has to be struck between these two competitive claims. Theworkers and employees although were ready to work but due to closureGof industries could not work and suffered. For smooth running of industrieswith the participation of the workforce, it is essential that a via media befound out.The obligatory orders having been issued on 29.03.2020 whichhas been withdrawn w.e.f. 18.05.2020,in between there has been only50 days during which period, the statutory obligation was imposed. Thus,the wages of workers and employees which were required to be paid asH

per the order dated 29.03.2020 and other consequential notification wasduring these 50 days.

35. In most of the industries, factories and establishments, theworkers are represented by Trade Unions or other Employeesassociations. The State is also under obligation to ensure that there issmooth running of industrial establishment and the disputes between theemployers and employees may be conciliated and sorted out.

36. It cannot be disputed that both Industry and Labourers needeach other. No Industry or establishment can survive without employees/labourers and vice versa. We are thus of the opinion that efforts shouldbe made to sort out the differences and disputes between the workersand the employers regarding payment of wages of above 50 days and ifany settlement or negotiation can be entered into between them withoutregard to the order dated 29.03.2020, the said steps may restore congenialwork atmosphere.

37. We thus direct following interim measures which can be availedby all the private establishment, industries, factories and workers TradeUnions/Employees Associations etc. which may be facilitated by theState Authorities: - i)The private establishment, industries, employers who arewilling to enter into negotiation and settlement with theworkers/employees regarding payment of wages for 50 daysor for any other period as applicable in any particular Stateduring which their industrial establishment was closed downdue to lockdown, may initiate a process of negotiation withtheir employees organization and enter into a settlement withthem and if they are unable to settle by themselves submit arequest to concerned labour authorities who are entrustedwith the obligation under the different statute to conciliatethe dispute between the parties who on receiving suchrequest,may call the concerned Employees Trade Union/workers Association/ workers to appear on a date fornegotiation, conciliation and settlement. In event a settlementis arrived at, that may be acted upon by the employers andworkers irrespective of the order dated 29.03.2020 issued bythe Government of India, Ministry of Home Affairs.

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Aii)Those employers’ establishments, industries, factories whichwere working during the lockdown period although not to theircapacity can also take steps as indicated in direction No.(i).

iii) The private establishments, industries, factories shall permitthe workers/employees to work in their establishment whoBare willing to work which may be without prejudice to rightsof the workers/employees regarding unpaid wages of above50 days. The private establishments, factories who proceedto take steps as per directions (i) and (ii) shall publicise andcommunicate about their such steps to workers and employeesfor their response/participation. The settlement, if any, asCindicated above shall be without prejudice to the rights ofemployers and employees which is pending adjudication inthese writ petitions.

iv) The Central Government, all the States/UTs through theirMinistry of Labour shall circulate and publicise this order forDthe benefit of all private establishment, employers, factoriesand workers/employees.

38. In event, any settlement is entered between the employersand employees in the establishments which are before us, an affidavitgiving details shall be filed by next date of hearing.E

39. List in last week of July.

Divya Pandey

Directions issued.

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