NATIONAL KAMGAR UNION versus KRAN RADER PVT. LTD. & ORS. on 5 January 2018

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SUPREME COURT REPORTS[2018] 1 S.C.R. 74

[2018] 1 S.C.R.

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NATIONAL KAMGAR UNION

v.

KRAN RADER PVT. LTD. & ORS.

(Civil Appeal No. 20 of 2018)

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JANUARY 05, 2018

[R. K. AGRAWAL AND ABHAY MANOHAR SAPRE, JJ.]

Industrial Disputes Act, 1947– Chapter VB – s.25K –Applicability of – Closure of manufacturing unit by factory owner– Issuance of closure notice by the owner – Complaint by appellant-CUnion against the factory owner – Industrial Court held the closureillegal since 115 workers were found working at the relevant timeand s.25K was not complied with while effecting the closure of theunit – However, High Court held that 99 workers were foundworking in the Unit at the relevant time, thus, compliance of s.25KDwhile declaring the closure not required – Interference with – Held:Reasoning assigned by the High Court is just and reasonable, thus,does not call for interference – Total strength of workers employedat the relevant time in Unit was 99 and that the status of 16 disputedemployees could not be conclusively proved to be that of a“workman” – Appellant in order to prove the status of 16 employees,Edid not adduce any cogent evidence as against the evidence of thefactory owner, thus, it was not possible for this Court to hold thatthe finding of the High Court is wholly arbitrary or illegal or againstthe evidence – Since the strength of workers was below 100, it wasnot necessary for the factory owner to ensure compliance ofFChapter VB – s.25-K had no application to respondent No.1 – Thus,it is just and proper to award in lump sum a compensation ofRs.2,50,000/- to each worker who did not accept the compensation,after making proper verification – Maharashtra Recognition ofTrade Unions and Prevention of Unfair Labour Practices Act, 1971– s.28 – Sch. IV Items 9, 10.

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Constitution of India –Art. 136 – Appeal under – Questionof fact – Held: Is to be decided by the Courts on appreciation ofevidence adduced by the parties – Once the Courts record a findingon such question, be that of concurrence or reversal, the finding isusually held binding on this Court – Only when such finding isH

found to be against any provision of law or evidence or is perverse,it would not be held binding on the superior Court – Even if thequestion raised is one of the mixed question of fact and law, thisCourt would not readily interfere with the conclusion unless it ismanifestly or obviously erroneous.

Art. 227 – Supervisory jurisdiction – Exercise of – When –Held: While recording a finding, if it is noticed by the High Courtthat the subordinate Court has failed to take into consideration thematerial evidence or recorded a finding without there being anyevidence, then the High Court would be entitled to interfere in suchfinding in exercise of its supervisory jurisdiction u/Art. 227.

Disposing of the appeal, the Court

HELD: 1.1 There is no good ground to interfere in theimpugned judgment of the High Court. The reasoning assignedby the High Court appears to be just and reasonable calling nointerference. [Para 13][81-A]

1.2 If the strength of the workers was above 100 at therelevant time, in that event, the provisions of Section 25-K ofthe Industrial Disputes Act, 1947 were applicable to respondentNo.1 whereas if the strength was below 100, in such event, theprovisions of Section 25K had no application. In the case of former,the appellant-Union succeeds and in the case of later, respondentNo.1 succeeds. [Para 15][81-C-D]

1.3 The question as to what is the total strength of theworkers employed in the Unit or, in other words, how manyworkers were working in a particular unit is essentially a questionof fact. Such question is required to be decided by the Courts onappreciation of evidence adduced by the parties. Once the Courtsrecord a finding on such question, be that of concurrence orreversal, the finding is usually held binding on this Court whilehearing the appeal under Article 136 of the Constitution. It isonly when such finding is found to be against any provision of lawor evidence or is found to be wholly perverse to the extent thatno average judicial person could ever record such finding, it wouldnot be held binding on the superior Court.[Paras 17-19][81-E-G]

1.4 The question as to what is the status of a “workman”, ithas to be inferred as a matter of law from facts found and if the A

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Aquestion involved is one of drawing a legal inference as to thestatus of a party from facts found, it is not a pure question of fact.It is held that if the inference drawn by the tribunal in regard tothe status of the workman involved the application of certain legaltests, it necessarily becomes a mixed question of fact and law.Even if the question raised is one of the mixed question of factBand law, this Court would not readily interfere with the conclusionof the tribunal unless it is satisfied that said conclusion ismanifestly or obviously erroneous. [Paras 20, 21][81-H; 82-A-B]

Lloyds Bank Ltd. New Delhi v. Panna Lal GuptaAIR1967 SC 428 – referred to.C

1.5 Having perused the record, there is no inclination tointerfere in the finding recorded by the High Court though ofreversal. The High Court held that the total strength of workersemployed at the relevant time in respondent No.1’s Unit was 99and that the status of 16 disputed employees could not beDconclusively proved to be that of a “workman” for the reasonsstated. First, the High Court assigned the reasons as to why thefinding of the Industrial Court holding the strength of workers as115 is not factually and legally sustainable. Second, the reasonsassigned are neither arbitrary nor against the record and norEperverse to that event so as to call for any interference by thisCourt. Third, in these circumstances, this Court would be slowto appreciate the entire evidence afresh onthis question andlastly, such being a question of fact or a mixed question of lawand fact, it is binding on this Court.[Paras 23, 24][82-D-F]

1.6 Having gone through the evidence, it is found that theFHigh Court did not commit any jurisdictional error in reaching toits conclusion. The Industrial Court held that there was no disputeregarding the status of 79 workers. The dispute of status of anemployee was confined only to 36 employees, namely, whethertheir status was that of the “worker” or “supervisor”. The GIndustrial Court, however, held that the status of all the 36employees was that of “worker” and accordingly recorded afinding that 79+36 = 115 employees were working as “worker”in the Unit at the relevant time. [Para 25][82-G-H]

1.7 The High Court, however, while reversing the findingof the Industrial Court came to a conclusion that out of 36H

employees, only 20 employees could be regarded as “worker”and, therefore, the total strength of workers at all relevant timewas 79+20 = 99. The High Court rightly held that there was nocogent evidence adduced by the appellant to prove the status ofremaining 16 employees as to whether they also could beregarded as “worker” employed in the Unit and, therefore, itwas not possible to hold that the total strength of the workers atthe relevant time was more than 100, i.e., 115. While concurringwith the reasoning of the High Court, it is found that since theIndustrial Court did not elaborately discuss the issue regardingthe status of 16 employees while holding the strength of workersat 115 except clubbing 36(20+16) with 79, the High Court wasright in going into the evidence to the extent permissible andreversed the finding of Industrial Court. The Industrial Courtshould have examined the status of each such disputed employeeindependently for holding whether they could also be regardedas “worker”. It was, however, not done so. The appellant, in orderto prove the status of 16 employees, did not adduce any cogentevidence as against the evidence of the respondent No.1. It is,therefore, not possible for this Court to hold that the finding ofthe High Court is wholly arbitrary or illegal or against theevidence. [Paras 26, 27 and 29][83-C-D, G]

1.8 It is the duty of the High Court while exercising thesupervisory jurisdiction to see that the subordinate Court hasexercised its powers in accordance with law and did not commitany illegality or perversity in reaching to its conclusion. Whilerecording a finding, if it is noticed by the High Court that thesubordinate Court has failed to take into consideration thematerial evidence or recorded a finding without there being anyevidence, then the High Court would be entitled to interfere insuch finding in exercise of its supervisory jurisdiction underArticle 227 of the Constitution. Such is the case here. It is notproper to disturb the findings recorded by the High Court whichare more plausible and reasonable rather than that of the IndustrialCourt. [Paras 31-33][84-A-C]

1.9 Respondent No.1 had employed 99 workers in theirmanufacturing Unit at the time of declaring the closure of theUnit. Since the strength of workers was below 100, it was not ABC

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Anecessary for respondent No.1 to ensure compliance of ChapterVB. In such circumstances, the provisions of Section 25-K hadno application to respondent No.1. [Para 34][84-D-E]

1.10 Taking into consideration the background facts andcircumstances of the case, it is just and proper to award in lumpBsum a compensation of Rs.2,50,000/- to each worker who did notaccept the compensation, after making proper verification. If anyworker is not available for any reason, the amount payable tosuch worker be paid to his legal representatives or nearestrelatives, as the case may be. [Paras 38-39][85-B-C]

CCase Law Reference

AIR 1967 SC 428referred toPara 21

CIVIL APPELLATE JURISDICTION: Civil Appeal No. 20 of2018.

DFrom the Judgment and Order dated 12.09.2014 of the High Courtof Judicature at Bombay in Writ Petition No.5241/2003.

B. H. Marlapalle, Sr. Adv., Aditya Gaggar, Ajit Wagh, O. P.Gaggar, Apoorv Shukla, Advs. for the Appellant.

Sanjay R. Hegde, Sr. Adv., D. J. Bhanage, Vikas Mehta,EMs.Anushree Menon, Anil Kumar Mishra-I, Pranjal Kishore, AnkitDhawan, Advs. for the Respondents.

The Judgment of the Court was delivered by

ABHAY MANOHAR SAPRE, J. 1. Leave granted.F2. This appeal is filed by the appellant-Trade Union against thefinal judgment and order dated 12.09.2014 passed by the High Court ofJudicature at Bombay in Writ Petition No.5241 of 2003 whereby theHigh Court allowed the writ petition filed by respondent No.1-Kran RaderPvt. Ltd. and set aside the award dated 08.04.2003 passed by theIndustrial Court, Pune in a Complaint (ULP) No.544 of 1990 and, inGconsequence, dismissed the complaint filed by the appellant herein.

3. In order to appreciate the short issue involved in the appeal, it isnecessary to set out few relevant facts infra.

4. The appellant is the Trade Union registered under the TradeUnion Act, 1926 having several members working in Factories.H

NATIONAL KAMGAR UNION v. KRAN RADER PVT. LTD.[ABHAY MANOHAR SAPRE, J.]

Respondent No.1 owned a factory (manufacturing unit) at Pune. ThisUnit was originally owned by respondent Nos. 2 and 3 who, in turn, soldit to respondent No.4 in 1991 and then it was owned by respondentNo.1. The Unit was engaged in the manufacture of several componentslike Traction Gears for supply to Railways, forging for oil industries andother manufacturing units etc. The members of the appellant-Unionwere working in respondent No.1’s factory at all relevant time.

5. In 1990, respondent No.1 suffered business loss in running thesaid manufacturing unit and, therefore, decided to close down the saidunit permanently. With that end in view, respondent No.1 served a noticeof closure to the State Government (Maharashtra) under Section 25FFA of the Industrial Disputes Act, 1947 (in short, “ID Act”) on29.08.1990 with a copy to the appellant-Union expressing therein theirintention to close the operation of the Unit on expiry of 60 days witheffect from 29.10.1990.

6. The appellant-Union, felt aggrieved of the closure notice issuedby respondent No.1, filed complaint against respondent No.1 under Section28 read with Items 9 and 10 of the Schedule IV of the MaharashtraRecognition of Trade Unions and Prevention of Unfair Labour PracticesAct, 1971 (hereinafter referred to as “the Act”) in the Industrial Courtat Pune in October 1990 being Complaint(ULP) No.544/1990.

7. In substance, the grievance of the appellant in their complaintwas that since respondent No.1 had employed more than 100 workerson an average per working day for preceding 12 months in theirmanufacturing unit, the provisions of Chapter VB (Section 25-K) of theID Act and, in turn, all the relevant provisions contained therein wereapplicable to respondent No.1. It was alleged that due to this reason, itwas obligatory upon respondent No.1 to have ensured compliance of allthe relevant provisions applicable for closure of the Unit. It was allegedthat since admittedly the relevant provisions applicable to closure werenot complied with by respondent No.1, a case was made out under theID Act read with the Act to seek a declaration that the intended closuredeclared by respondent No.1, vide their notice dated 29.08.1990, is illegalunder the ID Act read with the Act with a further grant of all consequentialreliefs to each worker arising out of grant of such declaration sought bythe appellant in the Complaint in their favour.

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A8. Respondent No.1 (employer) filed a reply and denied thereinthe allegations made by the appellant-Union in their complaint. Accordingto Respondent No.1 they never employed more than 100 workers intheir Unit so as to attract the rigor of Chapter VB and other relatedprovisions of the ID Act to give effect to the closure. In other words,according to respondent No.1, the strength of workers working in theirBUnit was always less than 100 in number, therefore, the provisions ofChapter VB and the related provisions of the I.D. Act had no applicationto respondent No.1. It was, therefore, contended that the decision takenby respondent No.1 to close the Unit with effect from 29.10.1990 waslegal, proper and in accordance with law and hence could not be faultedCwith.

9. The parties adduced evidence (documentary/oral) in supportof their respective contentions. The Industrial Court, by its award dated08.04.2003, allowed the appellant’s complaint. It was held that respondentNo.1 had employed 115 workers at all relevant time in their Unit, therefore,Dthe provisions of Chapter VB of the ID Act were required to be followedwhile effecting the closure of the Unit. It was held that since the relevantprovisions were not complied with by respondent No.1, the closure inquestion was bad in law entitling the members of the appellant-Union toclaim all consequential benefits arising therefrom as if there was noclosure of the Unit.E

10. Respondent No.1 felt aggrieved and filed a writ petition beforethe Bombay High Court. By impugned judgment, the Single Judge allowedthe writ petition and while setting aside of the award of the IndustrialCourt dismissed the appellant’s complaint. The High Court held that thetotal strength of the workers working at all relevant time in respondentFNo.1’s Unit was 99 and not 115 as held by the Industrial Court. It washeld that due to this reason, it was not necessary for respondent No.1 toensure compliance of the provisions of Chapter VB of the ID Act whiledeclaring the closure of their Unit.

11. The appellant-Union felt aggrieved and filed the present appealGby way of special leave in this Court.

12. Heard Mr. B.H. Marlapalle, learned senior counsel for appellantand Mr. D.J. Bhanage and Mr. Sanjay R. Hegde, learned senior counselfor respondents.

13. Having heard the learned counsel for the parties at length andon perusal of the record of the case, we find no good ground to interferein the impugned judgment of the High Court. In other words, the reasoningassigned by the High Court appears to be just and reasonable calling nointerference for the reasons mentioned hereinbelow.

14. The main question, which arises for consideration in this appeal,is only one, viz., how many workers were working in the Unit ofrespondent No.1 at all relevant time, whether the strength of the workerswas above 100 or below 100. In other words, the question, which arisesfor consideration, is whether the provisions of Section 25-K of ChapterVB of the ID Act were applicable to respondent No. 1-Unit at therelevant time.

15. If the strength of the workers was above 100 at the relevanttime, in that event, the provisions of Section 25-K were applicable torespondent No.1 whereas if the strength was below 100, in such event,the provisions of Section 25K had no application. In the case of former,the appellant-Union succeeds and in the case of later, respondent No.1succeeds.

16. As mentioned above, the Industrial Court held that 115 workerswere found working at the relevant time whereas the High Court heldthat 99 workers were found working in the Unit of respondent No.1 atthe relevant time.

17. There can be no dispute to the proposition that the question asto what is the total strength of the workers employed in the Unit or, inother words, how many workers were working in a particular unit isessentially a question of fact. Such question is required to be decided bythe Courts on appreciation of evidence adduced by the parties.

18. Once the Courts record a finding on such question, be that ofconcurrence or reversal, the finding is usually held binding on this Courtwhile hearing the appeal under Article 136 of the Constitution.

19. It is only when such finding is found to be against any provisionof law or evidence or is found to be wholly perverse to the extent that noaverage judicial person could ever record such finding, it would not beheld binding on the superior Court.

20. When the question arises as to what is the status of a“workman”, this Court has held that it has to be inferred as a matter oflaw from facts found and if the question involved is one of drawing a A

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Alegal inference as to the status of a party from facts found, it is not apure question of fact. It is held that if the inference drawn by the Tribunalin regard to the status of the workman involved the application of certainlegal tests, it necessarily becomes a mixed question of fact and law.

21. This Court has, however, cautioned that it must be rememberedBthat even if the question raised is one of the mixed question of fact andlaw, this Court would not readily interfere with the conclusion of theTribunal unless it is satisfied that said conclusion is manifestly or obviouslyerroneous. (See AIR 1967 SC 428)

22. With a view to examine the question from both angels whichCis taken note of above, we perused the evidence and also called uponthe parties to file additional evidence before this Court and it was filed.

23. Having perused the record, we are not inclined to interfere inthe finding recorded by the High Court though of reversal. In otherwords, we are inclined to agree with the reasoning of the High CourtDand accordingly hold that the total strength of workers employed at therelevant time in respondent No.1’s Unit was 99 and that the status of 16disputed employees could not be conclusively proved to be that of a“workman” for the reasons stated infra.

24. First, the High Court assigned the reasons as to why theEfinding of the Industrial Court holding the strength of workers as 115 isnot factually and legally sustainable. Second, the reasons assigned areneither arbitrary nor against the record and nor perverse to that event soas to call for any interference by this Court. Third, in these circumstances,this Court would be slow to appreciate the entire evidence afresh onthisquestion in this appeal and lastly, such being a question of fact or aFmixed question of law and fact, it is binding on this Court.

25. Inspite of this, we have gone through the evidence with aview to find out as to whether the High Court has committed anyjurisdictional error in reaching to its conclusion. In our view it is not.We notice that the Industrial Court held that there was no dispute regardingGthe status of 79 workers. The dispute of status of an employee wasconfined only to 36 employees, namely, whether their status was that ofthe “worker” or “supervisor”. The Industrial Court, however, held thatthe status of all the 36 employees was that of “worker” and accordinglyrecorded a finding that 79+36 = 115 employees were working as “worker”in the Unit at the relevant time.H

26. The High Court, however, while reversing the aforementionedfinding of the Industrial Court came to a conclusion that out of 36employees, only 20 employees could be regarded as “worker” and,therefore, the total strength of workers at all relevant time was 79+20 =99. In our opinion, the High Court rightly held that there was no cogentevidence adduced by the appellant to prove the status of remaining 16employees as to whether they also could be regarded as “worker”employed in the Unit and, therefore, it was not possible to hold that thetotal strength of the workers at the relevant time was more than 100,i.e., 115.

27. We, while concurring with the reasoning of the High Court,also find that since the Industrial Court did not elaborately discuss theissue regarding the status of 16 employees while holding the strength ofworkers at 115 except clubbing 36(20+16) with 79, the High Court wasright in going into the evidence to the extent permissible and reversedthe finding of Industrial Court. In our view, the Industrial Court shouldhave examined the status of each such disputed employee independentlyfor holding whether they could also be regarded as “worker”. It was,however, not done so.

28. Mr. B.H. Marlapalle, learned senior counsel for the appellant-Union, strenuously argued with the help of the entire evidence and therelevant provisions of the Factories Act, 1948 and the Payment of WagesAct including the statutory forms prescribed in the two Acts for filingthe details of workers working in the Unit that the finding of the IndustrialCourt appears to be more plausible and reasonable as compared to thefinding recorded by the High Court on this question and hence the findingof the Industrial Court deserves to be restored.

29. We cannot accept this submission of learned counsel for theappellant in the light of what we have held above. In our view, theappellant, in order to prove the status of 16 employees, did not adduceany cogent evidence as against the evidence of the respondent No.1. Itis, therefore, not possible for this Court to hold that the finding of theHigh Court is wholly arbitrary or illegal or against the evidence. We donot wish to go into this factual question any more.

30. Learned counsel for the appellant then urged that the HighCourt has committed a jurisdictional error when it went on to re-appreciatethe evidence and then reversed the finding of the Industrial Court under A

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AArticle 227 of the Constitution. In our view, it does not appear to be so.

31. It is the duty of the High Court while exercising the supervisoryjurisdiction to see that the subordinate Court has exercised its powers inaccordance with law and did not commit any illegality or perversity inreaching to its conclusion.

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32. While recording a finding, if it is noticed by the High Courtthat the subordinate Court has failed to take into consideration the materialevidence or recorded a finding without there being any evidence, thenthe High Court would be entitled to interfere in such finding in exerciseof its supervisory jurisdiction under Article 227 of the Constitution. SuchCis the case here.

33. In the light of foregoing discussion, we do not consider properto disturb the findings recorded by the High Court which are moreplausible and reasonable rather than that of the Industrial Court.

34. In view of the foregoing discussion, we also hold that respondentDNo.1 had employed 99 workers in their manufacturing Unit at the timeof declaring the closure of the Unit in 1990. Since the strength of workerswas below 100, it was not necessary for respondent No.1 to ensurecompliance of Chapter VB. In other words, in such circumstances, theprovisions of Section 25-K had no application to respondent No.1.

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35. This takes us to examine the next question as to how muchcompensation and under which heads the workers are entitled to receivefrom respondent No.1 (Company).

36. Learned counsel for respondent No.1, however, stated thatout of total workers, most of the workers have settled their claims byFaccepting the compensation offered by respondent No.1 voluntarily.Learned counsel stated that the compensation paid to each workerconsisted of (i) amount of Gratuity payable under the Payment of GratuityAct, (ii) closure compensation payable under the I.D. Act, and over andabove these two statutory payments of compensation, the respondentNo.1 also paid 30 days’ wages for each completed year of service as exGgratia payment to each worker. It was also stated that now hardly 16workers or so remain unpaid because they did not accept thecompensation when offered to them and preferred to prosecute thepresent litigation.

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37. Learned counsel for respondent No.1 stated that the totalcompensation paid to every worker in 1990-1991 varies between Rs.1lakh to Rs.2 lakhs.

38. Taking into consideration the aforementioned background factsand circumstances of the case, we consider it just and proper to awardin lump sum a compensation of Rs.2,50,000/- (Rs.Two Lakhs and FiftyThousand) to each worker who did not accept the compensation.

39. Let Rs.2,50,000/- (Rs.Two Lakhs and Fifty Thousand) be paidto each such worker after making proper verification. If any worker isnot available for any reason, the amount payable to such worker be paidto his legal representatives or nearest relatives, as the case may be,after making proper verification.

40. Respondent No.1 will, accordingly, deposit the entirecompensation payable to all such workers with details in the IndustrialCourt, Pune. A notice will then be served to each worker or his legalrepresentatives, as the case may be, by the Industrial Court to enablethe workers to withdraw the amount from the Industrial Court.

41. The amount will be paid to every worker or his nominee asthe case may be by the demand draft issued in his/her name or in thename of legal representatives, as the case may be. It will be dulydeposited in his/her Bank account to enable him/her to withdraw thesame.

42. The appellant would submit necessary details of each suchworker before the Industrial Court. The Industrial Court would ensurecompliance of the directions of this Court and complete all formalitieswithin three months from the date of this order.

43. We make it clear that this order is applicable only to thoseworkers who did not accept the compensation from respondent No.1.

44. In other words, those workers who already accepted thecompensation will not be entitled to get any benefit of this order.

45. With these directions, the appeal stands disposed of finally.

Nidhi Jain

Appeal disposed of.

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