Sunil Kr. Ghosh &
Ors. Vs. K. Ram Chandran & Ors.
J U D G M E N T
P. Sathasivam, J.
appeals are directed against the final judgments and orders dated 20.06.2008 and
25.08.2008 passed by the High Court at Calcutta in CPAN No. 539 of 2002 and MAT
No. 519 of 2008 respectively whereby the High Court dismissed the contempt application
and the appeal filed by the appellants herein - employees/workers of Philips
(a) The appellants are
the employees/workers of Philips India Ltd. (in short `the Company') having its
Registered office at No. 7, Justice Chandra Madhab Road, Calcutta and its Consumer
Electronics Factory at Salt Lake City, Calcutta. In the year 1997, the Company
introduced Voluntary Retirement Scheme (in short "VRS") for its
workmen and majority of them opted for and accepted the same.
On 30.09.1998, the Company
entered into an Agreement for Sale of its Consumer Electronics Factory at Salt
Lake City with Kitchen Appliances India Limited, a subsidiary of Videocon
International Ltd. as a going concern together with all assets and liabilities.
Vide letter dated 12.10.1998, the Company informed the Secretary of Workers'
Union about having signed the agreement and also withdrew the Voluntary
Retirement Scheme (VRS) launched in the year 1997.
transfer, the Company circulated a Notice for Extra-ordinary General Meeting of
its share holders and circulated a Proposed Resolution under Section 293 of the
Companies Act, 1956. On 16.11.1998, the Workers' Union filed an application
under Section 10(2) of the 2Industrial Disputes Act, 1947 (in short `the Act') for
referring the dispute to Court of Enquiry, Labour Court/Tribunal.
(b) On 01.12.1998, a Suit
being Civil Suit No. 483 of 1998 was instituted in the High Court at Calcutta by
two Employees' Unions in representative capacity against the proposed
resolution to be passed at the extra-ordinary general meeting of the Company. Vide
order dated 16.03.1999, the learned single Judge of the High Court passed an order
of injunction restraining the Company from giving effect to the said Resolution
and to the Agreement for Sale dated 30.09.1998.
Being aggrieved by
the order of the learned single Judge, the Company filed an appeal being APO No.
230 of 1999 before the Division Bench of the High Court. Vide order dated
13.09.1999, the Division Bench allowed the appeal filed by the Company. Thereafter,
employees' unions filed SLP (C) No. 14274 of 1999 before this Court which was
dismissed by this Court on 15.10.1999. Against the same, Review Petition No.
1585 of 1999 was filed which was also dismissed.
(c) On 22.12.1999, both
the Company and Kitchen Appliances India Ltd. issued a notice informing the
employees that consequent upon transfer of ownership of the Consumer Electronics
Factory, the employment of all the workmen has been taken over by the Kitchen Appliances
India Ltd with immediate effect and their services will be treated as continuous
and not interrupted by the transfer of ownership and the terms and conditions
of services will not be in any way less favourable than those applicable
immediately prior to the transfer of ownership.
Workers' Union filed two
title suits being T.S. Nos. 788 and 795 of 1999, inter alia, praying for declaration
and permanent injunction restraining the Company from giving effect to notice dated
22.12.1999. On 29.12.1999, the Workers' Union addressed a letter to the Company
submitting their strong protest against the transfer and also stating that the
Company has been restrained to give effect to the said notice in view of order dated
23.12.1999 passed by the Civil Judge (Junior Division) at Sealdah in Title Suit
No. 795 of 1999.
(d) Workers' Union filed
Writ Petition No. 2275 of 1999 before the High Court for early disposal of
workers' application for a reference. Vide order dated 19.09.2000, the writ
petition was disposed off with a direction to the Labour Commissioner to pass necessary
order either in terms of Sections 12(4) or 12(5) of the Act. On 13.12.2000, Labour
Department, Government of West Bengal refused to refer the dispute for adjudication
by observing that the interests of the workmen are in no way affected due to
transfer of ownership. Aggrieved by the said decision, the Workers filed a Writ
Petition being No. 12125 of 2001 before the High Court.
Vide order dated 08.10.2001,
the writ petition was disposed off with a direction to pay retirement/retrenchment
benefits to the workers. Contempt Application being No. 539 of 2002 was filed by
the workers, inter alia, alleging violation of the order dated 08.10.2001 which
was dismissed by the single Judge of the High Court on 20.06.2008. On
21.07.2008, the workers filed MAT No. 519 of 2008 before the Division Bench of the
High Court which was also dismissed vide order dated 25.08.2008.
(e) Being aggrieved, the
Workers' Unions have filed these appeals before this Court by way of special
Mr. Colin Gonsalves, learned senior counsel for the appellants-workers and Mr.
Jay Savla, learned counsel for respondent Nos. 1 & 2 -Management.
point for consideration in these appeals is whether the workmen are entitled to
the benefit of the order dated 08.10.2001 passed by the learned single Judge of
the High Court, particularly, in the absence of any appeal or challenge before
the higher forum by the Management?
is the specific case of the appellants-workmen that when the Company informed
the workmen about the transfer of ownership of Consumer Electronics Factory at Salt
Lake City, to Kitchen Appliances India Ltd., the said move was not acceptable
by the appellants-workers and they refused to give their consent.
According to the materials
placed on record, on 16.11.1998, the Workers' Union filed an application under Section
10(2) of the Act for referring the dispute to Court of Enquiry/Labour Court/Tribunal
and on 22.12.1999, the undertaking of the respondent-Management was transferred
to Kitchen Appliances India Ltd. Pursuant to the said transfer, 311 employees
joined the transferee company and 35 did not agree to join the new employer. On
29.12.1999, on behalf of the declined employees, their Union raised a dispute
regarding transfer of ownership of the Company without their consent as illegal.
Even on 13.12.2000,
Labour Department, Government of West Bengal declined the reference. On 06.03.2001,
the workers asked for VRS from Philips India Ltd. alleging that they do not
wish to join the new employer and when the same request was turned down by the
Company on the ground that the VRS lapsed even in October, 1998, challenging
the refusal to refer and seeking direction for payment of VRS, the workers filed
petition being Writ Petition No. 12125 of 2001 before the High Court.
08.10.2001, the learned single Judge of the High Court disposed of the writ petition
with a direction to the respondent-Management for payment of retirement and retrenchment
benefits to the workers. Inasmuch as the workers very much relied on the order of
the learned single Judge dated 08.10.2001, it is useful to refer to the
directions 7made therein.
While declining to interfere
with the order of rejection made for reference, the learned single Judge of the
High Court issued the following directions: "However, the petitioners shall
be entitled to all retirement benefits with effect from the date of approval of
the undertaking to Kitchen Appliances Ltd. and Philips India Limited shall pay
all such retirement benefits payable to the employees within six months from
Such benefits will be
given as per normal Rules and conditions of service including the retrenchment benefit.
Such benefits shall be available to the employees upto the date of approval. With
the aforesaid observations, this writ application is disposed of."
is not in dispute that the order was passed by the learned single Judge on
08.10.2001 after hearing the counsel for the petitioners therein (Workers) and the
respondent therein (Management) including the Government counsel. It is also not
in dispute that the said order has become final since neither the Management
nor the Government challenged the same before the Division Bench of the High Court
or in this Court.
let us consider whether the said order dated 08.10.2001 is acceptable or not. Inasmuch
as while rejecting the challenge made to refer the matter for adjudication
before the Labour Court/Tribunal, the learned single Judge, in order to protect
and safeguard the interests of the workmen, issued such directions taking note of
various aspects including several safeguards provided in the Act and also the
payment of compensation in case of transfer of an undertaking.
No doubt, the Management
raised an objection that these workmen neither availed the VRS within the stipulated
time nor retired/retrenched from the service due to the transfer of ownership of
It is true that the appellants-workers
did not avail both the conditions. But at the same time, it is not in dispute
and it cannot be disputed that these workmen resorted to several remedies such as
filing a suit, making representation to the Management as well as to the officers
of the Labour Department for consultation and consideration and finally to the Government
for referring the matter to the Labour Court/Tribunal for adjudication.
attempts, these workmen filed Writ Petition before the High Court. The learned single
Judge of the High Court has taken note of proposal for transfer between Philips
India Ltd. and Workers' Union and all other subsequent events including 9the
fact that the Company launched VRS to its employees who did not opt to Kitchen
Appliances India Ltd.
After noting that the
dispute was sought to be raised but the appropriate government declined to refer
the same, the learned single Judge, after considering the rival contentions of
the workmen and the Management, declined to interfere with the impugned order
therein and dismissed the same.
However, the learned single
Judge, taking note of the fact that the workmen did not give their consent for
change of management, issued a positive direction about the settlement of retirement
benefits with effect from the date of approval of the undertaking to Kitchen Appliances
Ltd. and directed the Company to pay all such retirement benefits payable to the
employees as per normal rules and conditions of service including the retrenchment
benefits within six months.
We have already referred
to the admitted fact that the said order was passed as early as on 08.10.2001
and has become final.
is settled law that without consent, workmen cannot be forced to work under
different management and in that event, those workmen are entitled to retirement/retrenchment
compensation in terms of the Act. In view of the same, we are of the view that
the workmen are entitled to the benefit of such direction and it is the obligation
on the part of the Management- Philips India Ltd., to comply with the same.
We are also satisfied
that the learned single Judge was conscious of the fact that these workmen failed
to avail the VRS within the stipulated time and also did not retire from the service.
However, taking note of the fact that the workmen cannot be compelled to join the
transferee company against their wish and without their consent and all along
fighting for their cause in various forums such as Civil Court, Labour Court, the
Government and the High Court and even in this Court, we are of the view that
the learned single Judge was fully justified in passing such order.
perusal of the directions passed by the learned single Judge leaves no room for
doubt that a mandatory duty was cast upon respondent Nos. 1 & 2 to comply
with the same. In such circumstances, it is highly improper on the part of the Management
now to turn around and to contend that since the appellants-workmen had neither
been retired nor resigned nor retrenched from service, as such, there is no question
of any payment or to comply with the directions passed by the learned single
entire genesis of the contempt application pertains to violation of order dated
08.10.2001 passed by the learned single Judge of the High Court. We are
satisfied that the said order was passed by the learned single Judge after
hearing all the parties in the nature of mandatory directions to respondent Nos.
1 & 2. The High Court, in the impugned order, instead of dismissing the
contempt application ought to have directed the respondents to implement the order
dated 08.10.2001 passed by the learned single Judge.
view of the above, we are satisfied that the appellants-workmen have made out a
case for interference by this Court. Accordingly, we direct the respondent-Philips
India Ltd. to comply with the directions made by the learned single Judge vide
order dated 08.10.2001, which we have quoted in earlier paragraphs, within a
period of three months from the date of the receipt of this judgment.
civil appeals are allowed on the above terms. No order as to costs.