Page 1

C.A. No. 246 of  2009                                       1

    IN THE SUPREME COURT OF INDIA    CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NO.246 OF 2009

M/S ARIANE ORGACHEM PVT. LTD.          …APPELLANT Vs.

WYETH EMPLOYEES UNION & ORS.         …RESPONDENTS WITH

C.A. NO. 247 OF 2009

J U D G M E N T

V. GOPALA GOWDA, J.       I.A.No.2 of 2015 in C.A.No.247 of 2009 for

substitution of the name of the appellant-Company

is ordered.      

2.   These  appeals  are  directed  against  the

common impugned judgment and order dated 16.8.2007

passed by the High Court of Judicature at Bombay

in Writ Petition No.444 of 2007, whereby the High

Court quashed the order of the Deputy Commissioner

of  Labour,  Mumbai,  dated  14.8.2006  and  directed

him  to  refer  the  industrial  dispute  of  the

concerned  workmen  as  per  their  demand  dated

REPORTABLE

Page 2

C.A. No. 246 of  2009                                       2

14.11.2005, for adjudication of the matter to the

Industrial Tribunal under Section 10(1)(d) of the

Industrial  Disputes  Act,  1947  (for  short  “the

Act”).  3.   Since both the appeals are filed against the

common  impugned  judgment  and  order  of  the  High

Court, for the sake of convenience, we would refer

to the brief facts of C.A.No.246 of 2009 which are

stated hereunder:

   The appellant-Company, M/s. Ariane Orgachem

Pvt.  Ltd.  was  established  to  manufacture  and

market  drugs  which  are  manufactured  by  it.  The

appellant-Company,  have  taken  over  the  alleged

loss  incurring  pharmaceutical  factory  of  M/s.

Wyeth  Ltd.  respondent  No.3  herein

(appellant-Company in C.A.247 of 2009), situated

at 146, LBS Marg, Ghatkopar, Mumbai, along with

its permanent employees, pursuant to an agreement

dated 25.6.2004 and the sale deed dated 30.6.2004.

The  letters  were  issued  to  the  workmen  by  the

appellant in this regard, to the effect that they

would be employed under its management without any

Page 3

C.A. No. 246 of  2009                                       3

interruption in their services. 4.  On 30.08.2004, the appellant-Company acquired

the erstwhile manufacturing facility of M/s. Wyeth

Ltd.-respondent  No.3  and  on  31.8.2004,  the

respondent  No.3  issued  letters  to  its  workmen

working in its erstwhile factory, informing them

about the sale and transfer of the ownership and

management  of  the  said  factory  to  the

appellant-Company in accordance with the provision

of  Section 25-FF  of the  Act. They  were further

informed  that  their  services  will  not  be

interrupted  due  to  such  transfer  and  their

services  will  be  treated  as  continuous  and

uninterrupted for the purpose of retiral/terminal

benefits.  Thereafter,  all  the  workmen  whose

employment came to be transferred from M/s Wyeth

Ltd.  to  the  appellant-Company  started  drawing

their  wages/salary  and  all  other  benefits  like

advance, LTA and leave, etc. from the appellant. 5.  On  2.9.2004,  the  respondent  no.1-Wyeth

Employees Union (for short “the Union”), which is

the recognized Union under the Provisions of the

Page 4

C.A. No. 246 of  2009                                       4

Maharashtra  Recognition  of  Trade  Unions  and

Prevention  of  Unfair  Labour  Practices  Act,  1971

(for short “the MRTU & PULP Act”), filed Complaint

(ULP) No. 534 of 2004, before the Industrial Court

challenging the sale and transfer of employment of

the employees but no interim relief was granted by

the Industrial Court, hence, all the workmen came

on  the  rolls  of  appellant-Company  and  started

drawing wages from it.        6.  The  appellant  claimed  that  it  has  framed

Voluntary Retirement Scheme (for short “VRS”) on

12.4.2005 for the workmen, offering amounts, tax

free, to each workman with all other dues such as

gratuity,  ex-gratia,  provident  fund,  leave

encashment etc. which was operative from 12.4.2005

to 30.4.2005. On 15.04.2005, 45 out of the total

143 workmen applied for the said VRS and collected

the  VRS  payments  and  the  remaining  workmen

collected  the  VRS  payments  on  20.04.2005  and

21.04.2005. After the payment of the VRS benefits,

the workmen were relieved from their services by

the appellant-Company.

Page 5

C.A. No. 246 of  2009                                       5

7.   It  is  further  stated  by  the

appellant-Company  that  on  26.4.2005,  the  first

respondent-Union  through  its  General  Secretary,

unconditionally withdrew Complaint (ULP) Nos. 534

of 2004, 714 of 2004 and 771 of 2004, confirming

to the court that all the workmen had availed the

VRS  and  the  Union  did  not  want  to  pursue  the

cases.

8.  After several months of accepting the VRS,

the  respondent-Union  raised  the  demand  seeking

their reinstatement in the Company of respondent

no.3.  In  response  to  the  said  demand,  the

appellant-Company replied that all the workmen had

taken  the  VRS  benefits  and  they  were  not  the

workmen  of  either  the  appellant-Company  or  the

third respondent’s Company anymore, therefore, no

industrial dispute could be raised by or on their

behalf by the respondent-Union. On 12.12.2005, the

respondent-Union, wrote a letter to the Assistant

Commissioner of Labour, seeking his intervention

in respect of their demand with the Company. On

01.08.2006, the  Conciliation  Officer  sent  the

Page 6

C.A. No. 246 of  2009                                       6

failure  report  to  the  Assistant  Commissioner  of

Labour,  subsequent  to  which  on  14.08.2006,  the

office  of  the  Deputy  Labour  Commissioner  which

took cognizance of  the failure report declined to

make  an  order  of  reference  to  the  Industrial

Tribunal  stating  thereby  that  there  was  no

industrial  dispute  in  existence  between  the

parties.

9.  Thereafter, the newly elected leadership of the  first  respondent-Union  under  the

representation  of  its  new  General  Secretary

aggrieved by the order of refusal to make an order

of  reference  to  the  Industrial  Tribunal  by  the

Deputy Commissioner of Labour filed Writ Petition

No.  444  of  2007  before  the  High  Court  urging

various  legal  grounds  and  questioning  the

correctness of the same.

10. The  High  Court  in  exercise  of  its  power

quashed the order dated 14.8.2006 passed by Deputy

Commissioner of Labour, Mumbai, who has refused to

make  an  order  of  reference  to  the  Industrial

Tribunal  for  its  adjudication  of  the  industrial

Page 7

C.A. No. 246 of  2009                                       7

dispute between the parties. The High Court has

held that the acceptance of the benefits by the

concerned  workmen  from  the  appellant  may  not

establish the fact that no force or compulsion was

exercised by the appellant and this is the most

contentious  and  disputed  question  of  fact  which

could  not  have  been  decided  by  the  State

Government  in  exercise  of  its  administrative

power. The High Court has held that the subjective

satisfaction  of  the  subject  matter  of  an

industrial  dispute  between  the  parties  by  the

State Government is therefore, vitiated in law and

making  an order  of reference  in respect  of the

concerned workmen is absolutely essential in this

regard. Thus, the High Court by issuing a writ of

mandamus, directed the Deputy Labour Commissioner

to make an order of reference to the Industrial

Tribunal with regard to the demand of industrial

dispute raised by the Union dated 14.11.2005 on

behalf  of  the  concerned  workmen,  for  its

adjudication  under  Section  10(1)(d)  of  the  Act.

Aggrieved  by  the  impugned  judgment  of  the  High

Page 8

C.A. No. 246 of  2009                                       8

Court,  these  appeals  have  been  filed  by  the

appellant-Companies,  praying  this  Court  to  set

aside the same contending that the High Court has

exceeded its jurisdiction in passing the impugned

judgment and order.

11. It is urged by Mr. C.U. Singh, the learned

senior counsel on behalf of the appellant-Company

that  the  VRS  benefits  were accepted  by  the concerned workmen between 15.4.2005 to 25.4.2005

and the cheques which were issued to them towards

their voluntary retirement benefits were encashed

by them. Therefore, raising the industrial dispute

by the concerned workmen after lapse of 7 months,

from the date of acceptance of the VRS benefits,

is wholly untenable in law. It has been further

contended by him that many concerned workmen have

cleared their bank loans such as housing loans,

Co-operative  Society/Co-operative  bank  loans  and

the  appellant-Company  has  received  intimations

from  the  Banks/Societies  to  stop  deducting  and

remitting loan instalments from their salaries.  

12. It has been further contended by him that the

Page 9

C.A. No. 246 of  2009                                       9

former  Joint  Secretary  of  the  respondent

no.1-Union had withdrawn the Complaint (ULP) Nos.

534 of 2004 and 714 of 2004 and Complaint (ULP)

No.771 of 2004, after stepping into the witness

box  and  confirming  to  the  Court  that  all  the

workmen had availed the VRS benefits and the first

respondent-Union did not wish to pursue the cases.

Therefore,  the  demand  raised  by  the  first

respondent-Union  on  behalf  of  the  concerned

workmen through its General Secretary contending

that they have not availed the VRS benefits under

the scheme is only an afterthought and the same

does  not  amount  to  an  industrial  dispute  and

therefore, there is no dispute for the Industrial

Tribunal  to  adjudicate.  The  Deputy  Labour

Commissioner has rightly arrived at the conclusion

on the basis of the facts on hand and declined to

make  an  order  of  reference  to  the  Industrial

Tribunal  for  adjudication  of  the  same.  This

important aspect of the case has not been taken

into  consideration  by  the  High  Court  while

quashing the order of refusal to make an order of

Page 10

C.A. No. 246 of  2009                                       10

reference to the Industrial Tribunal and it has

erroneously  issued  a  writ  of  mandamus  to  the

Deputy  Commissioner  of  Labour  against  the

appellant  by directing  him to  make an  order of

reference of the industrial dispute on the demands

raised by first respondent-Union on behalf of the

concerned workmen.

13. It is further contended by the learned senior

counsel on behalf of the appellant that the first

respondent-Union  has  not  made  any  allegation

against  the  appellant,  regarding  the  alleged

coercion  and  fraud  played  by  the  appellant  in

obtaining the voluntary retirement letters, either

in  the  demands  submitted  to  the  appellant  or

before  the  Conciliation  Officer.  Therefore,

raising  the  said  contention  by  the  first

respondent-Union  for  the  first  time  before  this

Court, without it being first raised before the

Industrial Tribunal and the Conciliation Officer

is not permissible in law as held by this Court in

the case of Bishundeo Narain & Anr. v. Seogeni Rai

& Anr.1  Further, it is contended that in view of 1  (1951)  SCR  548

Page 11

C.A. No. 246 of  2009                                       11

Section 59 of the MRTU and PULP Act, there is an

express bar on the first respondent to raise an

industrial dispute against the appellant-Company.

This legal aspect of the case has been considered

by this Court in the cases of  M/s. Mahabir Jute

Mills Ltd., Gorakhpur v. Shri Shibban Lal Saxena &

Ors.2 and  Govind Sugar Mills Ltd. & Anr.  v.  Hind

Mazdoor Sabha & Ors.3 Further, the said allegations

made by the first respondent-Union with regard to

the alleged coercion upon the concerned workmen by

the  appellant  is  not  factually  correct  and  the

same cannot be considered by this Court as it is a

frivolous and incorrect statement of fact made on

behalf of the first respondent-Union with a view

to raise frivolous industrial dispute against the

appellant-Company and the respondent No.3. 14.  The learned senior counsel has further placed

reliance  upon  the  following  decisions  of  this

Court in Bank of India & Ors. v. O.P. Swarnakar &

Ors.4,  A.K.  Bindal  &  Anr.  v.  Union  of  India  &

Ors.5, Punjab National Bank v. Virender Kumar Goel 2   (1975) 2 SCC 818 3   (1976) 1 SCC 60 4   (2003) 2 SCC 721 5   (2003) 5 SCC 163

Page 12

C.A. No. 246 of  2009                                       12

& Ors.6, Punjab & Sind Bank & Anr.  v.  S. Ranveer

Singh Bawa & Anr.7 and Bank of India & Ors. v. K.V.

Vivek Ayer & Anr.8 in support of the proposition of

law that once the VRS is obtained and accepted by

the  concerned  workmen  along  with  all  other

monetary  benefits,  the  same  would  amount  to

availing benefits of the scheme and no claim can

be  made  by  the  concerned  workmen  against  the

employer for its reconsideration and no order of

reference can be made for the industrial dispute

by the appropriate government as the same does not

exist for adjudication. Therefore, the principle

of estoppel is applicable on the concerned workmen

to  raise  an  industrial  dispute  against  the

appellant-Company and the respondent No.3 herein

on the subject matter of voluntary retirement, for

the  reason  that  once  they  have  accepted  the

voluntary  retirement  from  their  services  and

withdrawn  all  the  monetary  benefits  which  were

paid to them by the appellant, they cannot raise

the industrial dispute in this regard as the same 6   (2004) 2 SCC 193 7   (2004) 4 SCC 484 8   (2006) 9 SCC 177

Page 13

C.A. No. 246 of  2009                                       13

is not permissible in law. He has further placed

reliance upon the judgments of this Court in the

cases of Gyanendra Sahay v. Tata Iron & Steel Co.

Ltd.9 and  Vice-Chairman  &  Managing  Director,

A.P.S.I.D.C. Ltd. & Anr. v. R. Varaprasad & Ors.10,

wherein the aforesaid principles of law have been

reiterated by this Court. 15.  Further, it has been contended by him that

the  scope of  judicial review  power of  the High

Court  to examine  the order  passed by  the State

Government in exercise of its administrative power

in the writ petition is very limited as has been

held  by  this  Court  in  the  cases  of  Secretary,

Indian Tea Association v. Ajit Kumar Barat & Ors.11

and  ANZ Grindlays Bank Ltd.  v.  Union of India &

Ors.12 Therefore,  the  learned  senior  counsel  has

submitted that the impugned judgment and order is

required to be interfered with by this Court in

exercise of its jurisdiction as the exercise of

judicial review power by the High Court is bad in

law which cannot be allowed to sustain.  9   (2006) 5 SCC 759 10   (2003) 11 SCC 572 11   (2000) 3 SCC 93 12  (2005) 12 SCC 738

Page 14

C.A. No. 246 of  2009                                       14

16.  On the other hand, Mr. Sanjay Singhvi, the

learned  senior  counsel  on  behalf  of  the  first

respondent-Union  has  sought  to  justify  the

impugned  judgment  and  order  passed  by  the  High

Court  contending  that  the  Deputy  Labour

Commissioner acting as a delegatee of the State

Government  has  erroneously  refused  to  make  an

order of reference to the Industrial Tribunal on

the  demands  raised  by  the  workmen  and  he  has

committed a grave error in law and therefore, the

High Court has rightly exercised its extraordinary

and supervisory jurisdiction and quashed the same

by issuing a writ of mandamus. The learned senior

counsel  has  further  contended  that  the  Deputy

Commissioner of Labour in fact and in law is not a

delegatee of the State Government and therefore,

he could not have legally made an order of refusal

to make an order of reference of the industrial

dispute  to  the  Industrial  Tribunal  for  its

adjudication. It has been further contended by him

that the signatures of the concerned workmen were

obtained  on  blank  papers  and  there  was  no  VRS

Page 15

C.A. No. 246 of  2009                                       15

scheme  introduced  by  the  appellant.  Hence,  the

question  of  seeking  voluntary  retirement  from

their  services  does  not  arise.  Further,  the

respondent  No.3-M/s.  Wyeth  Ltd.,  the  Company  in

which the concerned workmen were working initially

had  intimated  the  stock  exchange  about  the

stoppage  of  its  manufacturing  operations  at  the

Company’s  plant  at  LBS  Marg,  Ghatkopar,  Mumbai.

Therefore,  it  is  clear  that  the  said  Company

wanted to discontinue and close down the factory

and  terminate  the  services  of  the  concerned

workmen  from  their  services.  However,  being  a

profitable Company, with profit making operations,

the  Company  has  resorted  to  achieve  its  end

through a subterfuge by obtaining the signatures

of the concerned workmen on the blank papers by

using undue influence, coercion etc. in order to

circumvent the provisions of Section 25(O) of the

Act. Therefore, the alleged voluntary retirement

of the concerned workmen, is a disputed question

of fact, as the workmen are contending that they

have not voluntarily submitted any application for

Page 16

C.A. No. 246 of  2009                                       16

voluntary  retirement  from  their  services  to  the

appellant-Company which fact is seriously disputed

by  the  appellant  and  therefore,  the  same  is

required  to  be  adjudicated  by  the  competent

Industrial  Tribunal  and  not  referring  the  said

dispute  between  the  parties  by  the  State

Government to it is an arbitrary and unjustified

exercise  of  power  which  is  not  within  the

jurisdiction of the State Government, in exercise

of its administrative power under the provisions

of Section 10(1)(d) read with the Third Schedule

of the Act. For the above reason itself, the High

Court is justified in quashing the impugned order

in  the  writ  petition  by  passing  the  impugned

judgment  and  order  which  does  not  warrant

interference  by  this  Court  in  exercise  of  its

appellate jurisdiction in these appeals.   17. It has been further contended by the learned

senior counsel for the first respondent-Union that

the appellant-Company is owned and controlled by

the Runwal group, which is a builder/developer and

it has entered into a sham arrangement with M/s

Page 17

C.A. No. 246 of  2009                                       17

Wyeth  Ltd. on  30.8.2004 purporting  it to  be an

alleged  transfer  of  the  ownership  of  its

undertaking in favour of the appellant. However,

it is a transfer of the assets of the Company only

without  the  transfer  of  the  business  of  the

appellant in the connected appeal (respondent no.3

herein)  and  the  same  cannot  be  said  to  be  a

genuine transfer of undertaking of M/s Wyeth Ltd.

in accordance with law and in terms of Section 25

FF  of  the  Act.  The  said  action  of

appellant-Company and the respondent no.3 herein

is in violation of the provisions of Section 25(O)

of the Act.

18.  Thus,  it  is  urged  by  the  learned  senior

counsel that in view of the aforesaid reasons the question of the alleged transfer of the workmen

from M/s. Wyeth Ltd. to the appellant-Company is

only  a  ruse  and  was  done  only  with  a  view  to

acquire the property for real estate development.

Therefore,  the  factual  contentious  issue  of  the

alleged  voluntary  retirement  of  the  concerned

workmen  and  the  acceptance  of  the  monetary

Page 18

C.A. No. 246 of  2009                                       18

benefits  by them  need to  be adjudicated  by the

competent  Industrial  Tribunal  under  an  order  of

reference of the industrial dispute which has to

be referred by the State Government. This aspect

of the matter has not been considered by the State

Government  at  the  time  of  passing  an  order

declining to exercise its administrative power to

make  an  order  of  reference  to  the  Industrial

Tribunal  for  its  adjudication  of  the  existing

industrial  dispute  between  the  workmen  and  the

employer effectively.

19. Further, it has been contended by the learned

senior counsel that the alleged VRS benefits said

to have been given to the concerned workmen is a

false plea pleaded by the appellant-Company before

the Conciliation Officer to justify their illegal

action  and  the  same  requires  scrutiny  by  the

Industrial Tribunal on the basis of the evidence

that  has  to  be  adduced  by  the  parties.  The

findings of fact need to be recorded by it after

adjudication of the dispute that is required to be

referred to it by the State Government in exercise

Page 19

C.A. No. 246 of  2009                                       19

of its administrative power under the provisions

of the Act.  

20. It has been further contended by the learned

senior counsel on behalf of the first respondent

that after the resignation of the earlier General

Secretary  of  the  first  respondent-Union  was

accepted, a new Committee of the respondent-Union

was elected. Thereafter, it decided to take up the

issue of illegal termination of services of the

concerned  workmen  by  the  appellant-Company.

Further, the Deputy Labour Commissioner, who has

acted as the delegatee of the State Government,

has not looked into the fact that it took about 2

to 3 months for the new Committee of the first

respondent-Union to take over the affairs of the

Union which was running under the guidance of its

former General Secretary and to act in the matter

of the forced termination of the concerned workmen

from their services. The petition submitted to the

Conciliation  Officer  by  the  respondent-Union

specifically  pleads  that  “neither  any  voluntary

scheme  was  ever  framed  nor  published  by  the

Page 20

C.A. No. 246 of  2009                                       20

appellant”  and  the  concerned  workmen  have  not

retired  from  their  services  voluntarily.  This

aspect  of  the  matter  has  not  been  taken  into

consideration by the Conciliation Officer as well

as the appropriate State Government at the time of

passing  the order  refusing to  make an  order of

reference  to  the  Industrial  Tribunal  for

adjudication of the industrial dispute. The State

Government has also not noticed the relevant fact

that  the  former  General  Secretary,  without  the

proper  authorisation  from  either  the  first

respondent-Union  or  the  concerned  workmen,

withdrew the earlier complaints referred to supra,

filed on behalf of the concerned workmen. Further, the State Government has failed to consider the

fact that the appellant-Company has stated about

the VRS being published for the concerned workmen

for the first time, only before it and not before

the  Conciliation  Officer  in  the  earlier

proceedings.  Further,  due  to  coercion  and  fear,

the workmen were compelled to sign on the blank

papers  and  the  purported  voluntary  retirement

Page 21

C.A. No. 246 of  2009                                       21

letters  alleged  to  have  been  submitted  to  the

appellant  were  not  considered  by  it.  The  first

respondent-Union called upon the appellant-Company

to  produce  the  Resolution  passed  by  its  Board

before  the  Conciliation  Officer,  with  regard  to

the alleged VRS and the order of approval said to

have been granted by the Income Tax Authority for

such  scheme. The  same were  not produced  by the

appellant  before  the  Conciliation  officer. The State Government at the time of passing its order

ought  to  have  considered  this  important  factual

aspect of the matter before refusing to pass an

order  to  make  a  reference  to  the  Industrial

Tribunal regarding the dispute between the parties

in relation to their illegal termination. For this

reason  also,  the  High  Court  is  justified  in

quashing the order of refusal to make an order of

reference and therefore, it is rightly justified

in  issuing  a  writ  of  mandamus  to  the  State

Government to make an order of reference to the

jurisdictional  Industrial  Tribunal  for

adjudication of the industrial dispute between the

Page 22

C.A. No. 246 of  2009                                       22

parties.

21. The learned senior counsel has further urged

that  the  failure  report  of  the  dispute  was

addressed  to  the  Additional  Commissioner  by  the

Conciliation Officer on 1.8.2006, but the Deputy Commissioner of Labour called for the file from

the Conciliation Officer and declined to exercise

his  power  under  Section  10(1)(d)  read  with  the

Third Schedule of the Act, without adverting to a

single contention urged on behalf of the workmen

in the petition submitted before the Conciliation

Officer  by  the  first  respondent-Union.  The

non-consideration  of  the  claim  made  by  the

respondent-Union  on  behalf  of  the  concerned

workmen by the Deputy Commissioner of Labour at

the  time  of  refusing  to  pass  an  order  of

reference, not only vitiates the impugned order in

the writ petition on account of non application of

mind  by  the  alleged  delegatee  of  the  State

Government but also vitiated in law for the reason

that the Deputy Commissioner of Labour is not the

competent officer to make an order of reference to

Page 23

C.A. No. 246 of  2009                                       23

the Industrial Tribunal or to refuse to make an

order of reference to the Industrial Tribunal. The

Additional  Commissioner  of  Labour  is  the  only

competent authority who is the delegatee of the

State  Government  as  per  the  notification  dated

9.8.2003  issued  by  the  Ministry  of  Labour,

Government of Maharashtra and therefore, he alone

could  have  passed  an  order  of  reference  under

Section 10(1)(d) of the Act. Thus, the order of refusal  to  make  an  order  of  reference  of  the

existing industrial dispute between the parties to

the Industrial Tribunal is  void ab initio in law

as the same has not been exercised by competent

officer as the delegatee of the State Government.

On this ground itself the impugned judgment and

order of the High Court is justified in quashing

the order of refusal to make an order of reference

regarding the industrial dispute to the Industrial

Tribunal.

22. With reference to the above mentioned rival

legal contentions urged on behalf of the parties,

we have carefully examined the impugned judgment

Page 24

C.A. No. 246 of  2009                                       24

and order, with a view to find out whether the

High Court is justified in quashing the order of

refusal to make an order of reference regarding

the  industrial  dispute  raised  by  the  first

respondent-Union  on  behalf  of  the  concerned

workmen  to  the  Industrial  Tribunal  for  its

adjudication.  We  answer  the  same  in  the

affirmative  in  favour  of  the  first

respondent-Union for the following reasons:-      It is an undisputed fact that the concerned

workmen are the employees of M/s Wyeth Ltd. who is

the respondent no.3 herein and the appellant in

the connected appeal. The contention urged by the learned  senior  counsel  on  behalf  of  the

respondent-Union is that the alleged transfer of

the undertaking of M/s Wyeth Ltd. in favour of the

appellant-Company is not a genuine transfer and it

is a sham one, as it is a transfer of the assets

of the Company only not the transfer of business

of M/s Wyeth Ltd. Therefore, the same is not in

conformity with the provisions of Section 25FF of

the  Act. This  aspect  of  the  matter  requires adjudication by the Industrial Tribunal in order

Page 25

C.A. No. 246 of  2009                                       25

to find out the correctness of the plea, whether

the transfer of the undertaking M/s Wyeth Ltd. in

favour  of  the  appellant  is  genuine  or  not  and

whether  the  concerned  workmen  have  accepted  the

retiral  benefits  and  other  monetary  claims

voluntarily,  as  pleaded  by  the  appellant. This complicated  question  of  fact  and  law  could  not

have been decided by the alleged delegatee of the

State Government in exercise of its administrative

power,  as he  is not  the competent  authority on

behalf of the State Government to make an order of

reference  to  the  Industrial  Tribunal. The conclusion  arrived  at  by  the  High  Court  is

supplemented with the reasons arrived at by this

Court. Therefore, quashing of the order of refusal to make an order of reference by the High Court is

perfectly  legal  and  valid  which  need  not  be

interfered with by this Court in exercise of its

jurisdiction.

23. The other important factual aspect of the case

is  whether  the  voluntary  retirement  of  the

concerned workmen was forced or not is required to

Page 26

C.A. No. 246 of  2009                                       26

be produced by the parties before the Industrial

Tribunal  for  its  detailed  examination  and

scrutiny. The  fact  that  certain  documents  were sought  to be  summoned at  the instance  of first

respondent-Union  during  the  conciliation

proceedings  from  the  appellant-Company  by  the

Conciliation Officer which were not produced by it

is one more important factor which is required to

be  considered  by  the  Industrial  Tribunal  under

Section 10(1)(d) read with the Third Schedule of

the Act in exercise of its original jurisdiction

to  resolve  the  disputed  questions  of  fact.

Further,  the  VRS  produced  on  record  by  the

Management gives it the discretion to arbitrarily

fix the compensation varying from Rs.50,000/- to

Rs.7,11,000/-,  which  if  proved,  would  be

considered as arbitrary and there would be a grave

miscarriage of justice to the concerned workmen.

This aspect of the matter has been ignored by the

Deputy  Labour  Commissioner,  who  has  erroneously

refused  to  make  an  order  of  reference  to  the

Industrial  Tribunal for  its  adjudication  of  the

Page 27

C.A. No. 246 of  2009                                       27

existing industrial dispute.

24. Further,  there  are  serious  allegations  made

against  the  appellant-Company  by  the  workmen

regarding  the  alleged  coercion,  undue  influence

and  force  used  on  them  for  obtaining  their

signatures  on  blank  papers,  which  needs  to  be

examined very carefully by the Industrial Tribunal

after  recording  evidence  from  both  the  parties. Prima facie, the absence of documentary evidence

produced by the appellant-Company to show that the

VRS was framed by it and converting the signatures

of  the  concerned  workmen  obtained  on  the  blank

papers  amounts  to  forced  termination  of  the

services  of  the  concerned  workmen  which  is  a

disputed  question  of  fact  which  requires

adjudication by the competent Industrial Tribunal

and  therefore,  the  demand  regarding  the  alleged

termination of the concerned workmen is required

to be referred to the Industrial Tribunal by the

State  Government. The  non  consideration  of  this aspect of the matter in the order dated 14.08.2006 passed  by  the  Deputy  Labour  Commissioner

Page 28

C.A. No. 246 of  2009                                       28

highlighting  only  the  factual  aspect  pleaded  by

the  appellant-Company  unilaterally  and  not

referring to the facts pleaded on behalf of the

concerned workmen by the first respondent-Union is

once again totally marred by non application of

mind  on the  part of  the Deputy  Commissioner of

Labour, apart from the fact that the Deputy Labour

Commissioner  has  no  competency  to  exercise  his

power under the provisions of Section 10(1)(d) of

the Act, either to make reference or to refuse to

make reference to the Industrial Tribunal. On the

above  grounds  also,  the  impugned  judgment  and

order  of  the  High  Court  is  not  required  to  be

interfered with by this Court in these appeals.

Reliance has been placed upon the decision of this

Court by the learned senior counsel on behalf of

the first respondent-Union in the case of National

Insurance Co. Ltd. v. Boghara Polyfab Pvt. Ltd.13,

wherein this Court has held thus: “26.  When  we  refer  to  a  discharge  of contract by an agreement signed by both parties  or  by  execution  of  a  full  and final discharge voucher/receipt by one of the parties, we refer to an agreement or discharge  voucher  which  is  validly  and

13  (2009) 1 SCC 267

Page 29

C.A. No. 246 of  2009                                       29

voluntarily executed. If the party who has executed  the  discharge  agreement  or discharge  voucher,  alleges  that  the execution of such discharge agreement or voucher  was  on  account  of fraud/coercion/undue  influence  practiced by  the  other  party  and  is  able  to establish  the  same,  then  obviously  the discharge  of  the  contract  by  such agreement/voucher  is  rendered  void  and cannot  be  acted  upon.  Consequently,  any dispute  raised  by  such  party  would  be arbitrable.”

25. Further,  the  failure  report  of  the

conciliation  proceedings  is  not  the  sufficient

material evidence to arrive at the conclusion by

the State Government to decline to exercise its

statutory  power  under  the  provisions  of  Section

10(1)(d) read with the Third Schedule of the Act

either  to  make/or  not  to  make  an  order  of

reference.  The  refusal  to  make  an  order  of

reference  by  the  State  Government’s  delegatee

amounts to determination of the existing dispute

between the parties by the State Government in the

absence  of  relevant  and  material  evidence  on

record which ought not to have been done by him

while exercising his power under Section 10(1)(d)

of the Act. In this regard, the High Court has

Page 30

C.A. No. 246 of  2009                                       30

rightly placed reliance upon the case of Ram Avtar

Sharma & Ors. v. State of Haryana & Anr.14,  the

relevant para of which reads thus:  “11. The appropriate Government being the Central Government in this case declined to make a reference as per its order dated December  9,  1983  in  which  it  is  stated that  'the  action  of  the  management  in imposing on the workmen penalty of removal from service on the basis of an enquiry and in accordance with the procedure laid down in the Railway Servants (Discipline & Appeal)  Rules.  1968  is  neither  malafide nor  unjustified.  The  appropriate Government does not consider it necessary to  refer  the  dispute  to  the  Industrial Tribunal  for  adjudication.'  Ex  facie  it would appear that the Government acted on extraneous  and  irrelevant  considerations and  the  reasons  hereinbefore  mentioned will mutatis mutandis apply m respect of present  order  of  the  Government  under challenge. Therefore for the same reasons, a writ of mandamus must be issued.

12. Accordingly all the writ petitions are allowed and the rule is made absolute in each  case.  Let  a  writ  of  mandamus  be issued  directing  the  appropriate Government in each case namely the State of Haryana in the first mentioned group of petitions  and  the  Central  Government  in the  second  petition  to  reconsider  its decision  and  to  exercise  power  under Section 10 on relevant and considerations germane to the decision. In other words, a clear  case  of  reference  under Section 10(1) in each case is made out.”

26. Further, the High Court has rightly adverted

14  (1985) 3 SCC 189

Page 31

C.A. No. 246 of  2009                                       31

to  various  judgments  of  this  Court  including

Bombay  Union  of  Jornalists  v.  State  of  Bombay15

wherein it was held thus:  

”6. ………it would not be possible to accept the plea that the appropriate Government is precluded from considering even prima facie the merits of the dispute when it decides  the  question  as  to  whether  its power  to  make  a  reference  should  be exercised  under  Section  10(l)read  with Section 12(5), or not. If the claim made is  patently  frivolous,  or  is  clearly belated  the  appropriate  Government  may refuse to make a reference. Likewise, if the  impact  of  the  claim  on  the  general relations  between  the  employer  and  the employees in the region is likely to be adverse,  the  appropriate  Government  may take that into account in deciding whether a  reference  should  be  made  or  not.  It must, therefore, be held that and prima facie examination of the merits cannot be said to be foreign to the enquiry which the appropriate Government is entitled to make  in  dealing  with  a  dispute  under Section 10(1)……”  

Therefore, in the present case, the dispute raised

by the respondent-Union on behalf of the concerned

workmen is neither patently frivolous nor is it a

belated  claim  of  the  concerned  workmen. The contention of the learned senior counsel for the

appellant that the workmen are barred from raising

15  AIR 1964 SC 1617

Page 32

C.A. No. 246 of  2009                                       32

the industrial dispute on the ground of estoppel,

is also rejected by this Court in view of the fact

that estoppel is a principle of equity which deals

with  the  effect  of  contract  and  not  with  its

cause. It does not mean that a void or voidable

contract cannot be adjudicated by the Industrial

Tribunal/courts  merely  because  the  concerned

workmen have accepted the voluntary retirement as

pleaded  by  them  and  other  benefits  from  the

appellant as per the case of  National Insurance

Co. Ltd. (supra).

27. Having regard to the facts and circumstances

of the case and the contentions urged on behalf of

the learned counsel for the parties, we have come

to  the  conclusion  that  these  are  the  disputed

questions  of  fact  in  this  case,  which  requires

determination  on  the  basis  of  evidence  by  the

Industrial  Tribunal  and  therefore,  a  valid

reference  has  to  be  made  to  it  by  the  State

Government. The various decisions relied upon by the  learned  senior  counsel  Mr.  C.U.  Singh  on

behalf  of  the  appellant  referred  to  supra  are

Page 33

C.A. No. 246 of  2009                                       33

misplaced  and have  no  application  to  the  fact situation of the present case.  28. Further,  the  High  Court  has  not  considered

another important aspect of the case, namely, that

the Deputy Commissioner of Labour is not entrusted

with the power under Section 10(1) (d) of the Act

as the delegatee of the State Government as per

the new Notification dated 09.08.2003, issued by

the  Industries,  Energy  and  Labour  Department,

Mantralaya,  Mumbai  in  exercise  of  its  power

conferred under Section 39(b) of the Act which is

produced on record. As per the said notification,

the State of Maharashtra has conferred its power

upon  the  Labour  Commissioner  and  the  Additional

Labour  Commissioner  to  exercise its  power  under Section 10(1),(2) & (3) and other provisions of

the Act.  There is no other notification produced by the employer either before the High Court or

this  Court  to  show  that  the  Deputy  Labour

Commissioner has got power as the delegatee of the

State  Government  to  make  an  order  of  reference

under the provisions of Section 10(1)(d) read with

Page 34

C.A. No. 246 of  2009                                       34

the Third Schedule of the Act to the Industrial

Tribunal.  On this ground also, the order of the Deputy  Labour  Commissioner,  refusing  to  make  an

order  of  reference  regarding  the  industrial

dispute of the concerned workmen is vitiated in

law, as the same is  void ab initio  in law and

therefore, quashing of the said refusal order by

the High Court is perfectly justified.  29.  The appellant-Company has also contended that the  respondent-Union  has  also  raised  the  legal

question  regarding  the  competency  of  the  Deputy

Labour  Commissioner  in  passing  the  order  of

reference for the first time before this Court and

the  same was  not raised  before the  High Court,

therefore, the same shall not be permitted to be

raised in these proceedings and this Court need

not go into this aspect of the matter which is

wholly untenable in law. This contention raised by

the learned senior counsel for the appellant is

rejected as the said contention is contrary to the

issues/principles laid down by the Privy Council

and this Court in the following judgments:

Page 35

C.A. No. 246 of  2009                                       35

   In Connecticut Fire Insurance Co. v Kavanagh16,

Lord Watson has observed as under:

“When a question of law is raised for the first time in a court of last resort, upon the construction of a document, or upon facts  either  admitted  or  proved  beyond controversy, it is not only competent but expedient, in the interests of justice, to entertain the plea.”

    The  aforementioned  view  of  the  Court  of

Appeal  have  been  relied  upon  by  this  Court  in

Gurcharan  Singh  v  Kamla  Singh17.  Therefore,  with

regard to the above mentioned aspect regarding the

plea  of  the  competency  of  the  Deputy  Labour

Commissioner to pass an order of refusal to make a

reference,  although  is  being  raised  before  this

Court  for the  first time,  is based  on admitted

facts. Hence, in accordance with the view taken by

the Court of Appeal in Connecticut Fire Insurance

Co. case (supra) and this Court in Gurcharan Singh

case  (supra), the argument advanced by the first

respondent-Union deserves to be considered by this

Court. Similar view has also been taken by this

Court in the cases of VLS Finance Limited v. Union 16  (1892) A.C 473, 480 (PC) 17  (1976) 2 SCC 152

Page 36

C.A. No. 246 of  2009                                       36

of  India18 and Greater  Mohali  Area  Development

Authority v. Manju Jain19, wherein it has been held

that pure question of law can be raised at any

stage  of  litigation.  In National  Textile

Corporation v. Naresh Kumar Jagad20,  it has been

held by this Court that a new ground raising pure

legal  issue  for  which  no  inquiry  or  proof  is

required, can be raised at any stage. Further, in

the case of Port Trust v Hymanshu International21,

this Court has held thus:

“2……. The plea of limitation based on this section  is  one  which  the  court  always looks  upon  with  disfavour  and  it  is unfortunate that a public authority like the Port Trust should, in all morality and justice, take up such a plea to defeat a just claim of the citizen. It is high time that  governments  and  public  authorities adopt  the  practice  of  not  relying  upon technical  pleas  for  the  purpose  of defeating  legitimate  claims  of  citizens and  do  what  is  fair  and  just  to  the citizens. Of course, if a government or a public  authority  takes  up  a  technical plea, the Court has to decide it and if the  plea  is  well-founded,  it  has  to  be upheld by the court, but what we feel is that such a plea should not ordinarily be taken  up  by  a  government  or  a  public authority, unless of course the claim is

18   (2013) 6 SCC 278 19  (2010) 9 SCC 157 20  (2011) 12 SCC 695 21  ( 1979) 4 SCC 176

Page 37

C.A. No. 246 of  2009                                       37

not well-founded and by reason of delay in filing it, the evidence for the purpose of resisting  such  a  claim  has  become unavailable……”

30.  The conclusion arrived at by the High Court

that  the  order  of  refusal  to  make  an  order  of

reference  of  the  existing  industrial  dispute  to

the Industrial Tribunal by the Deputy Commissioner

of Labour is bad in law and it has rightly issued

the writ of mandamus to the State Government and

the Deputy Commissioner of Labour for the reason

that the employer has been litigating the matter

before the High Court for several years and the

High Court, based on the pleadings and evidence on

record, must have felt that the disputed questions

of  fact  pleaded  by  the  parties  warrant  the

adjudication  of  the  dispute  effectively  by  the

Industrial Tribunal. Therefore, we do not find any reason to set aside the order of writ of mandamus

issued by the High Court to the State Government

represented by the Deputy Labour Commissioner.   31.  The  reliance  placed  upon  the  various

judgments  of  this  Court  by  the  learned  senior

Page 38

C.A. No. 246 of  2009                                       38

counsel for the appellant on merits of the alleged

voluntary retirement of the concerned workmen need

not be examined in these appeals by this Court, as

those judgments have no application to the fact

situation  of  the  present  case  and  it  would  be

premature to apply the said principles to the fact

situation  at  this  stage,  particularly,  having

regard  to  the  legal  contentions  urged  by  the

learned  senior  counsel  on  behalf  of  the

respondent-Union.

32. The learned senior counsel on behalf of the

appellant-Company has further contended that the

dispute  raised  by  the  first  respondent-Union  on

behalf  of  the  concerned  workmen  under  the

provisions of the Act and the request made by it

to refer the industrial dispute to the Industrial

Tribunal  for  its  adjudication  is  barred  under

Section 59 of the MRTU & PULP Act. The aforesaid

contention  is  wholly  untenable  in  law  for  the

reason that the cause of action for the present

complaint under the provisions of the Act is with

regard to the illegal action on the part of the

Page 39

C.A. No. 246 of  2009                                       39

appellant-Company  in  obtaining  the  alleged

voluntary  retirement  letters  from  the  concerned

workmen, whereas, the proceedings under the MRTU & PULP  Act  are  in  respect  of  the  alleged

transactions between the appellant-Company and M/s

Wyeth Ltd. which  has resulted in the transfer of

the services of the workers  from M/s. Wyeth Ltd.

to the appellant-Company which cause of action in

respect of these proceedings arose on 30.8.2004.

Thus, the present dispute is with regard to the

so-called “Voluntary Retirement” of the concerned

workmen which took place on 15.4.2005 and 20th/21st

April, 2005, wherein the subject matter is whether

such “Voluntary Retirement” was obtained by undue

influence, coercion, fraud, etc. and whether the

workmen  are  entitled  to  reinstatement  with  full

back wages and continuity of service. Therefore,

the  subject  matter  of  the  complaint under  the

provisions  of  MRTU  &  PULP  Act  and  the  subject

matter  of  the  industrial  dispute  raised  by  the

first respondent-Union under the provisions of the

Act  are totally  different as  they arise  out of

Page 40

C.A. No. 246 of  2009                                       40

different cause of action. Hence, the contention

urged in this regard by the learned senior counsel

on behalf of the appellant-Company must fail.

33. Hence,  in  our  considered  view  the  impugned

judgment  and order  passed by  the High  Court is

perfectly legal and valid and the same does not

call for interference by this Court except with

certain modification in the operative portion of

the order of the High Court, namely, with regard

to  the  direction  given  to  the  State  Government

represented  by  the  Deputy  Labour  Commissioner

which is not in accordance with the notification

referred to  supra. The said direction has to be given  to  the  Additional  Labour  Commissioner  (in

accordance with the Notification dated 09.08.2003)

to make an order of reference to the Industrial

Tribunal within six weeks from the date of receipt

of the copy of this order as the matter has been

pending at the reference making stage itself for

several  years  at  the  instance  of  the

appellant-Company and the respondent no.3 herein.  34. We therefore, issue the direction to the State

Page 41

C.A. No. 246 of  2009                                       41

Government  represented  by  its  delegatee,  the

Additional  Commissioner  of  Labour,  to  make  an

order  of  reference  to  the  competent  Industrial

Tribunal within six weeks from the date of receipt

of the copy of this judgment. We further direct the Industrial Tribunal to decide the case within

six months from the date of receipt of such order

of  reference  after  affording  an  opportunity  to

both the parties and to pass appropriate award.  35. The  Industrial  Tribunal shall  not  be influenced  by  the  observations  made  in  this

judgment.  The  Industrial  Tribunal  shall  examine

the  case  of  the  parties  with  reference  to  the

evidence that may be produced on record by them

and  the  rival  legal  contentions  that  would  be

urged on behalf of the parties may be considered

at the time of adjudication of the dispute and the

same  has  to  be  adjudicated  on  its  own  merit

uninfluenced  by  the  observations  made  in  the

judgment.

36. These appeals are dismissed with costs of Rs.

one lakh in each appeal towards the cost of these

Page 42

C.A. No. 246 of  2009                                       42

proceedings, for the reason that they have caused

delay in referring the dispute to the Industrial

Tribunal for its adjudication. The same shall be

deposited  before  the  Industrial  Tribunal

immediately after the order of reference is made

to it and before the parties are called upon to

file their respective claims and the said amount

shall  be  paid  to  the  concerned  workmen

proportionately  through  the  first

respondent-Union.  The  order  dated  24.9.2007

granting stay of the impugned order shall stand

vacated.

       ……………………………………………………………………J.                         [V.GOPALA GOWDA]

  ……………………………………………………………………J.                         [C. NAGAPPAN] New Delhi, April 29, 2015