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CASE NO.: Appeal (civil)  2431 of 2007

PETITIONER: Tulip Star Hotels and Ors

RESPONDENT: Union of Centaur-Tulip Employees and Ors

DATE OF JUDGMENT: 10/05/2007

BENCH: DR. ARIJIT PASAYAT & LOKESHWAR SINGH PANTA

JUDGMENT: J U D G M E N T

CIVIL APPEAL NO.       2431          OF 2007 (Arising out of S.L.P. (C) No. 6787 of 2006)

Dr. ARIJIT PASAYAT, J.

      Leave granted.  

       Challenge in this appeal is to the order passed by a  Division Bench of the Bombay High Court dismissing the  Letters Patent Appeal filed by the appellants.  

       Factual background as presented by the appellants is as  follows:         An agreement was entered into between the appellants  and the Hotel Corporation of India relating to purchase of  hotel called Centaur Hotel, Juhu Beach, on 31.3.2003. On  11.3.2002, an agreement was entered into wherein it was  stipulated that Voluntary Retirement Scheme (in short ’VRS’)  shall be introduced within one year from the transfer dated  31.5.2002 i.e by 31.5.2003. A Writ Petition was filed on  30.5.2003 with a prayer to enforce the VRS and alternatively it  was prayed that the appellant-company be directed to  independently float and pay according to VRS. By order dated  8.7.2003, the High Court directed the appellant-company to  consider and float the VRS. The said scheme was floated on  1.10.2003. On 27.10.2003 there was a meeting of the  recognized Union functionaries with the functionaries of the  appellant-company. A request was made to extend the time of  VRS upto 30.11.2003 to accept the option. This was confirmed  by the Union’s Advocate letter dated 29.10.2003. On  29.1.2004, applications of 570 workers for VRS were accepted  and payment was to be made by 29.4.2004. The terms were  set out in Clause 3.3. On 1.7.2004 notice of motion was taken  by officers of the appellant-company and on 2.7.2004 by the  workers. The prayer essentially was to do the needful within  such time as may be determined by the Court. In the counter  affidavit, the resolutions were referred to. One Sada Parab  represented the Union of workers. The modalities for  implementation of the VRS were fixed for both the officers and  the workers. The schedule for payments was also fixed.  Subsequently, there appears to be change of mind and after  acceptance, because of financial difficulties there was delay in  implementation of the VRS. Majority of the workers accepted  the cheques without demur. Some of the employees formed a  new trade union called "Union of Centaur Tulip Employees". A

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request was made by the employees for splitting in each case  the cheque amount i.e. VRS amount and on 5.5.2005 the writ  petition was withdrawn. Separate cheques were issued but the  respondents refused to accept the cheques so far as they  related to the VRS scheme. The loan amounts were adjusted  and no objection was raised.  

       Complaint was filed under the Maharashtra Recognition  of Trade Unions and Prevention of Unfair Labour Practices Act,  1971 (in short the ’Trade Union Act’). Objection was filed by  the present appellant taking the stand that in view of various  decisions of this Court complaint was not maintainable. The  Industrial Court rejected the objection and held that the  complaint was maintainable.  

       Writ petition was filed by the appellant and the learned  Single Judge dismissed the same. As noted above, the Division  Bench also affirmed the views of the Industrial Court and the  learned Single Judge.  

       In support of the appeal, learned counsel for the  appellants submitted that unfortunately both the Industrial  Court and the High Court did not consider the effect of several  judgments of this Court which had direct bearing on the  present issue. Before a learned Single Judge, a plea was  specifically urged but not dealt with. After having concluded  that the relationship of employer and employee existed learned  Single Judge observed that whether relationship of employer  and employee existed was kept open and the parties are at  liberty to advance evidence if any on that point.  The High  Court also did not consider those aspects. It is, therefore,  submitted that the impugned orders are liable to be set aside.  

       Per contra, learned counsel for the respondents  submitted that by now the whole enquiry would have been  over and unnecessarily the appellants have prolonged the  proceedings.  

We find that on the question of existence of relationship  between the employer and the employee in the background of  the Trade Union Act several decisions have been rendered (See  Vividh Kamgar Sabha v. Kalyani Steels Ltd. and Anr. (2001 (2)  SCC 381), Cipla Ltd. v. Maharashtra General, Kamgar Union  and Ors. (2001 (3) SCC 101) and Sarva Shramik Sangh v.  Indian Smelting & Refining Co. Ltd. and Ors. (2003 (10) SCC  455).

       Though the plea appears to have been specifically urged  before the Industrial Court and the High Court, no finding has  been recorded on the basic issue. It is also necessary to take  note of what has been stated by this Court in Vice-Chairman  and Managing Director, A.P. SIDC Ltd. and Anr. v. R.  Varaprasad and Ors. (2003 (11) SCC 572). In that case it was  held that delayed payment per se did not render the scheme to  be frustrated, on the contrary, the entitlement is of monthly  wages. The decision in General Labour Union (Red Flag),  Bombay v. Ahmedabad Mfg. & Calico Printing Co. Ltd. and  Ors. (1995 Supp (1) SCC 175) also throws considerable light  on the controversy.  

In Cipla’s case (supra) this Court observed that the  dispute is of summary nature. In that case it was inter alia  observed as follows:

       "5. \005..Therefore, the Labour Court

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dismissed the complaint filed by the first  respondent Union. When the matter was  carried by revision under the Act the Industrial  Court dismissed the revision application by re- iterating the views of the Labour Court.          6.    In the writ petition the Division  Bench of the High Court took a different view  of the matter and allowed the complaint.  Before the High Court several decisions were  referred to including the decision of this Court  in General Labour Union (Red Flag), Bombay v.  Ahmedabad Mfg. & Calico Printing Co. Ltd &  Ors., 1995 Supp. (1) SCC 175. In that case the  complaint of the Union was that 21 workmen  who were working in one of the canteens of the  respondent-company were not given the  service conditions as were available to the  other workmen of the company and there was  also a threat of termination of their services.  This Court proceeded to consider the case on  the basis that their complaint was that the  workmen were the employees of the company  and, therefore, the breach committed and the  threats of retrenchment were cognizable by the  Industrial Court or the Labour Court under  the Act. Even in the complaint no case was  made out that the workmen had ever been  accepted by the company as its employees. On  the other hand, the complaint proceeded on  the basis as if the workmen were a part of the  work force of the company. This Court noticed  that the workmen were never recognised by  the company as its workmen and it was the  consistent contention of the company that they  were not its employees. In those  circumstances, the Industrial Court having  dismissed the complaint and the High Court  having upheld the same, this Court stated that  it was not established that the workmen in  question were the workmen of the company  and in those circumstances, no complaint  could lie under the Act as was held by the two  courts. In that case it was the admitted  position that the workmen were employed by a  contractor, who was given a contract to run  the canteen in question. Thereafter, the High  Court adverted to the decision of this Court in  Gujarat Electricity Board, Thermal Power  Station, Ukai, Gujarat v. Hind Mazdoor Sabha  & Ors., (1995 (5) SCC 27) wherein  it was  noticed that the first question to be decided  would be whether an industrial dispute could  be raised for abolition of the contract labour  system in view of the provisions of the Act and,  if so, who can do so. The High Court was of the  view that the decision in General Labour Union  (Red Flag), Bombay v. Ahmedabad Mfg. &  Calico Printing Co. Ltd & Ors. (supra) would  make it clear that such a question can be gone  into and that the observations would not mean  that the workmen had to establish by some  other proceedings before the complaint is filed  or that if the complaint is filed, the moment  the employer repudiates or denies the  relationship of employer and employees the

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court will not have any jurisdiction. The  observation of this Court that it is open to the  workmen to raise an appropriate industrial  dispute in that behalf if they are entitled to do  so has to be understood in the light of the  observations of this Court made earlier. The  High Court further held that the judgment in  General Labour Union (Red Flag), Bombay v.  Ahmedabad Mfg. & Calico Printing Co. Ltd &  Ors. (supra) was confined to the facts of that  case. On that basis the High Court proceeded  to further consider the matter and reversed the  findings recorded by the two courts and gave a  finding that the workmen in question are the  workmen of the appellant-company.  

       The object was also spelt out at paragraph 8. It reads as  under:  "8. But one thing is clear - if the employees are  working under a contract covered by the  Contract Labour (Regulation & Abolition) Act  then it is clear that the labour court or the  industrial adjudicating authorities cannot have  any jurisdiction to deal with the matter as it  falls within the province of an appropriate  Government to abolish the same. If the case  put forth by the workmen is that they have  been directly employed by the appellant- company but the contract itself is a  camouflage and, therefore, needs to be  adjudicated is a matter which can be gone into  by appropriate industrial tribunal or labour  court. Such question cannot be examined by  the labour court or the industrial court  constituted under the Act. The object of the  enactment is, amongst other aspects, enforcing  provisions relating to unfair labour practices. If  that is so, unless it is undisputed or  indisputable that there is employer-employee  relationship between the parties, the question  of unfair practice cannot be inquired into at  all. The respondent union came to the Labour  Court with a complaint that the workmen are  engaged by the appellant through the  contractor and though that is ostensible  relationship the true relationship is one of  master and servant between the appellant and  the workmen in question. By this process,  workmen repudiate their relationship with the  contractor under whom they are employed but  claim relationship of an employee under the  appellant. That exercise of repudiation of the  contract with one and establishment of a legal  relationship with another can be done only in  a regular industrial tribunal/court under the  I.D.Act".  

       In Sarva Shramik Sangh’s case (supra) it was observed at  para 24 as follows:  

"24\005\005.In order to entertain a complaint  under the Maharashtra Act it has to be  established that the claimant was an employee  of the employer against whom complaint is

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made under the ID Act. When there is no  dispute about such relationship, as noted in  para 9 of Cipla case the Maharashtra Act  would have full application. When that basic  claim is disputed obviously the issue has to be  adjudicated by the forum which is competent  to adjudicate. The sine qua non for application  of the concept of unfair labour practice is the  existence of a direct relationship of employer  and employee. Until that basic question is  decided, the forum recedes to the background  in the sense that first that question has to be  got separately adjudicated. Even if it is  accepted for the sake of arguments that two  forums are available, the court certainly can  say which is the more appropriate forum to  effectively get it adjudicated and that is what  has been precisely said in the three decisions.  Once the existence of a contractor is accepted,  it leads to an inevitable conclusion that a  relationship exists between the contractor and  the complainant".  

       In Bank of India and Ors. v. K.V. Vivek Ayer and Anr.  (2006 (9) SCC 177), it was held that after acceptance even of a  part, there is no scope for withdrawal from a scheme.  

       Since the relevant aspects have not been considered by  the Industrial Court and the High Court, we set aside the  impugned orders of the Industrial Court and the learned  Single Judge and the Division Bench and direct re- consideration, by learned Single Judge, of the issues, as noted  above. Consideration shall be of applicability of the three  judgments in Vividh Kamgar,  Cipla and Sarva Shramik cases  (supra). The effect of part acceptance shall be considered as  also the question as to when there has been adjustment of the  sums payable in respect of the VRS. As the matter is pending  since long it would be appropriate for the learned Single Judge  to dispose of the matter as early as practicable, preferably  within three months from the date of receipt of this order. To  avoid unnecessary delay let the parties appear before the  learned Single Judge on 11.6.2007 for hearing of the matter.  Learned Chief Justice is requested to pass necessary orders in  this regard. It is stated that certain motions have been taken  out. They shall be considered while hearing the matter in the  light of the present judgment.  

       The appeal   is accordingly disposed of with no order as  to costs.