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CASE NO.: Appeal (civil)  6430 of 2003

PETITIONER: M P State Textile Corpn. Ltd.                     

RESPONDENT: Mehendra & Ors.                                     

DATE OF JUDGMENT: 11/04/2005

BENCH: N Santosh Hegde & S B Sinha            

JUDGMENT: J U D G M E N T

N SANTOSH HEGDE, J.  

       This appeal arises out of a judgment of the High Court of  Madhya Pradesh, Indore Bench, made in Writ Petition No.1974  of 2000 whereby the High Court by its order dated 17.9.2002  dismissed the writ petition filed by the appellant, challenging an  award made by the Labour Court, Ujjain, dated 4.5.2000 in  Case No.36 of 1999 whereby the said Labour Court allowed the  application of the respondent-workmen herein and while  holding that the respondent-workmen were employees of the  appellant-Corporation, set aside their retrenchment made by  Indore Textile Mills Ltd., Ujjain, and also directed the appellant  to pay the salary and benefits at par that is available to the  employees of the appellant-Corporation.

       In this appeal, the appellant-Corporation contends that  the respondent-workmen were recruited by the appellant- Corporation for and on behalf of Indore Textile Mills, Ujjain  and since the said Mills was closed, services of the workmen  were lawfully retrenched, hence, the Labour Court and the High  Court erred in directing their reinstatement in the appellant- Corporation. It is nextly contended that assuming that the  respondent-workmen were employees of the appellant- Corporation, still they were appointed on a personal pay-scale  of each of these respondent-workmen as evidenced by their  letter of appointment and their services were liable to be  transferred in terms of the said letters of appointment, therefore,  the Labour Court and the High Court were not justified in  directing the payment of salary to these workmen on a scale  which is otherwise available only to the workmen in the  appellant-Corporation.

       On behalf of the respondent-workmen it is contended that  the workmen were appointed by the appellant-Corporation after  regular procedure being followed and after interview and  though they were transferred to other establishments under the  appellant-Corporation like Indore Textile, Ujjain, they remained  to be the workmen of the appellant-Corporation and their  services could not have been terminated by Indore Textile,  Ujjain assuming that that Mill had closed. In such an event,  they are entitled to be transferred back to the parent body i.e.  the appellant herein. It was also contended that they are entitled  to the pay-scale of the appellant-Corporation that is being paid  to the employees in the similar cadre in the appellant- Corporation. They also contended that there have been

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instances of other workmen who were similarly selected like  the respondent-workmen who have been transferred to the  appellant-Corporation on a pay-scale available to the employees  of the appellant.

       We have heard learned counsel for the parties and  perused the records. The respondent-workmen were appointed  by the appellant-Corporation and their appointment letters are  on record. One such appointment letter of respondent No.1  shows that the appellant-Corporation entertaining an  application from him and after interviewing him appointed him  as a Shift Assistant (Spinning) and posted him at Indore Textile,  Ujjain on the terms and conditions mentioned in the said letter.  The first of the terms stated that the said respondent will be  paid a basic pay of Rs.850/- p.m. plus Industrial Dearness  Allowance and other allowances as per the rules in the pay- scale of Rs.680-1050 plus House Rent Allowance @ 15% of  the basic pay. Clause 3 of the terms of appointment says that  the respondent-workmen were liable to be transferred in terms  of the said letter of appointment to any unit managed by the  Corporation directly or indirectly. A reading of the said letter of  appointment along with the evidence led by the parties before  the Labour Court clearly shows that the respondent-workmen  applied for employment in the appellant-Corporation and it was  the appellant-Corporation which entertained their applications,  interviewed the said workmen and appointed them on the pay- scale mentioned in their letter of appointment. Under the said  appointment letter, the appellant had retained its right to  transfer the workmen to any unit managed by the appellant,  directly or indirectly. From this material on record, it is clear  that the workmen were appointed by the Corporation as its  employees and were transferred or deputed to various Textile  Mills under it, in the instant case, to Indore Textile, Ujjain,  therefore, if Indore Textile, Ujjain, suffered a closure, the  services of the respondent-workmen could not have been  terminated by the management of Indore Textile, Ujjain,  because the respondent-workmen were not its employees.  Therefore, the Labour Court as well as the High Court were  justified in coming to the conclusion that the respondent- workmen were the employees of the appellant-Corporation and  their retrenchment by Indore Textile, Ujjain is without authority  of law since they were not the employees or workmen of Indore  Textile, Ujjain.

       Coming to the next question whether the respondent- workmen are entitled to the pay-scale of Indore Textile, Ujjain,  or the appellant-Corporation, the Labour Court and the High  Court held that since the respondents were the workmen under  the appellant-Corporation, they ought to be paid the pay-scale  that is available to similarly situated workmen in the appellant- Corporation. We are unable to agree with the findings of the  High Court and the Labour Court in this regard. It is seen from  the letter of appointment that the respondent-workmen were   appointed on certain terms and conditions which included a  personal Pay to each one of the respondent-workmen, for  example in case of first respondent herein, it was on a basic pay  of Rs.850 plus Industrial D.A. and other allowances in the pay- scale of Rs.680-40-800-50-1200-60-1500 plus House Rent  Allowance @ 15% of the basic pay. The respondent-workmen  without demur accepted this pay and it remained to be their  personal pay even after their posting in Indore Textile and this  was not challenged by the workmen even though their  appointment was made as far back as 1979. It is only for the  first time when the services were retrenched along with the  challenge to the retrenchment, a claim for the pay-scale

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available in the appellant-Corporation was made as a  consequential relief. We think the respondent-workmen who  having accepted their employment on a contract, the terms of  which specified the pay-scale of each of these workmen,   cannot claim the pay-scale of the appellant-Corporation when  their services were retrenched by Indore Textile, Ujjain. In our  opinion, since the respondents accepted the pay-scale and did  not challenge the same for more than a decade, it is not open for  them to demand the pay-scale that may be available to similarly  situated workmen in the appellant-Corporation. To that extent  we are of the opinion that the Labour  Court has erred.

         For the reasons stated above this appeal is partly allowed  while confirming the findings of the Labour Court and the High  Court in regard to the relationship between the appellant and the  respondents, and the direction to reinstate the workmen in the  appellant-Corporation, the direction for payment of salary at par  with the workmen of the appellant is set aside. We direct the  appellant to pay to the respondent-workmen wages due in  accordance with the pay-scale offered in their letter of  appointment. This, however, will not prevent the respondent- workmen from seeking parity of pay with the other workmen of  the appellant in future, if permissible in law.          With the above observations, this appeal is partly  allowed.