REPORTABLE        

IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NOs. 9921-9922 OF 2011 (Arising out of SLP (C) Nos. 11115-11116 of 2009

Sunil Kr. Ghosh & Ors.               .... Appellant (s)

Versus

K. Ram Chandran & Ors.                               .... Respondent(s)

J U D G M E N T  

P. Sathasivam, J.

1) Leave granted.

2) These 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 India Ltd.  

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3) Brief facts:

(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.  For effecting 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  

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Industrial 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.   

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(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.  

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(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.  

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(e) Being  aggrieved,  the  Workers’  Unions  have  filed  these  

appeals  before this Court by way of special leave petitions.

4) Heard  Mr.  Colin  Gonsalves,  learned senior  counsel  for  

the appellants-workers and Mr. Jay Savla, learned counsel for  

respondent Nos. 1 & 2 –Management.

5) The 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?

6) It  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  

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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.

7) On  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  

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made 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 this date.  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.”    

8) It  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.

9) Now,  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  

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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  the  Company.   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.  After  

several 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  

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the 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.   

10) It 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  

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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.

11) A 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  

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nor retrenched from service, as such, there is no question of  

any payment or to comply with the directions passed by the  

learned single Judge.   

12) The 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.   

13) In 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.   

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14) The civil  appeals  are  allowed on the above terms.   No  

order as to costs.       

...…………….…………………………J.            (P. SATHASIVAM)                                   

  .…....…………………………………J.    (J. CHELAMESWAR)  

NEW DELHI; NOVEMBER 18, 2011.

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