KARNATAKA POWER TRANSMISSION CORPORATION LTD. AND ANR.versusTHE AMALGAMATED ELEC. CO. LTD. AND ORS.

                    KARNATAKA POWER TRANSMISSION                                     A
                      CORPORATION LTD. AND ANR.
                                          v.
             THE AMALGAMATED ELEC. CO. LTD. AND ORS.

                               DECEMBER 15, 2000
                                                                                     B
           [S. RAJENDRA BABU AND K.G, BALAKRISHNAN, JJ.)


          Labour Laws :

          Industrial Disputes Act, 1947-Sections 25-FF, 25-F-Labour dispute- C
    Workmen abstained from duty-Company taken over by Board-Reinstatement
    of workmen and back wages-Held, on facts, workmen to be reinstated with
    40% back wages as they were illegally denied employment-Karnataka
    Electricity Undertaking (Acquisition) Act, 1974.
                                                                                     D
          In 1971, there were labour disputes relating to lockout by Respondent-
    company, which resulted in some workers abstaining from work. The company
    re-started the business with about 65 workmen. The disputes were referred
'   to Industrial Tribunal. In the meantime, pursuant to passing of the Karnataka
    E!ectricity Undertaking (Acquisition) Act, 1974, the company was taken over
    by the Appellant-Board. Some workmen who abstained from work offered to          E
    work with the Board but were refused on the ground of pending Industrial
    Dispute. In 1978. the Tribunal passed an award holding that there was no
    lockout declared by the Company. With the passing of the award, the workmen
    again demanded the Board to permit them to duty. The workmen were not
    allowed to join duty and a fresh Reference was made to the Industrial Tribunal   F
    as to whether the management of the company and the Board were justified
    in refusing employment to the workmen with effect from 25.3.1971. The
    Tribunal held that the workers are entitled to reinstatement with 50% of the
    back wages from 7.10.1978. The Board challenged the award of the Tribunal
    before the High Court Since the High Court declined to interfere, the Board
    has preferred the present appeals.                                               G
           It was contended by the Board that there was an illegal strike by the
    workmen and the workers refused to join duty despite the offer made by the
    appellant; that at the time of acquisition and taking over of the management
    of the Company, the workmen were not workers of the Company and that the
                                         695
                                                                                     H
    696                     SUPREME COURT REPORTS (2000] SUPP. 5 S.C.R.

A    Board has no legal obligation to reinstate them in service; that in view of the
     earlier Reference in 1971, the second Reference was unjustified and the
     principles of res judicata would apply; that there was a delay of several years
     in raising the dispute and that the Tribunal should not have directed
     reinstatement of all the workers.

B         The workmen contended that there was an illegal lockout and in spite
    of the workers willing to work, they were denied employment from 25.3.1971
    onwards.

           Dismissing the appeals, the Court
c
           HELD: 1.1. The second Reference was warranted in view of the stand
    taken by the Company and the Board that the workmen were not entitled to
    join duty. Therefore, the principles of res judicata does not apply in the instant
    case. The workmen were not working in the Company at the time when the
    management of the Company was taken over by the Board as they were
D   illegally denied employment Nevertheless, the Company when it was legally
    bound to reinstate the workmen as the award of the Tribunal shows that they
    were illegally denied employment with effect from 25.3.1971. When the Board
    took-over the management of the Company, the workers made themselves
    available for work but were not allowed to join duty by the Board. (699-A, D, El
E
           1.2. The entire assets and liabilities of the Company were taken over
    by the Board. As per Section 25FF of the Industrial Disputes Act, 1947, where
    the ownership or management of an undertaking is transferred, whether by
    agreement or by operation of law from the employer in relation to that
    undertaking to a new employer, every workman who has been in continuous
F   service for not less than one year in that undertaking immediately before
    such transfer shall be entitled to notice and compensation in accordance with
    the provisions of Section 25F of the Act. The workers were not paid any such
    compensation as per Section 25F. The services of the workmen should be
    deemed to have been not interrupted by such transfer. Had the Company been
G   functioning, the Company would have been legally bound to engage the workers
    as their workmen by virtue of the award passed by the Tribunal. The Board,
    being the successor-in-interest, is bound to reinstate the workers as per the
    award passed by the Tribunal, meet the ends of justice. [699-E, F, G)

         1.3. Having regard to the facts and circumstances of the case, payment
H   of 40% of back wages would meet the ends of justice. 1700-B)
K.i'. I CORPN. LTD 1· AMALGA\.IATED ELEC CO. LTD. [K.G BALAKRISHNAti. J.J 697


      2. Some workers have either retired or died. The legal representatives       A
of the deceased workers are entitled to get back wages till the respective dates
of death of the deceased workers. The workmen who have retired shall be
entitled to get back wages from 7.10.1978 till the notional date of their
retirement. [700-E)

        CIVIL APPELLATE JVRISDICTION : Civil Appeal Nos. 1808-10 of                B
1998.

    From the Judgment and Order dated 04.09.1977 of the High Court of
Kamataka at Bangalore in Writ Appeal Nos. 3218, 3804 and 3805 of 1997.

     Kumar Ram Apte, S.K. Kulkarni, Ms. Sangeeta, Sunil Dogra, Ms. Monica          c
Sharma, S.A. Shroff & Co., Sunil Kumar Venna, S.M. Jadhav, Sayali Phatak and
Manu Nair for the appearing parties.

        The Judgment of the Court was delivered by

       K.G. BA LA KRISHNAN, J. Decision of the Kamataka High Court is              0
challenged in these appeals. The first respondent, the Amalgamated Electricity
 Company Ltd., was engaged in supply of electricity in Belgaum city. In the
year 1971, there arose some labour dispute. According to the workmen the
Company declared a lockout, whereas the management of the first respondent
Company contended that some of the workers had resorted to strike and              E
 refused to come for work. By the end December, 1971, the management of the
first respondent-Company started the business with about 65 workmen and
the other workers were not allowed to join duty. The first respondent-Company
contended that these workers were offered employment, but they refused to
join duty. Disputes relating to these issues were referred to the Industrial
Tribunal and in l.D. No. 11171, the Industrial Tribunal, Bangalore, passed an      F
award .on 17 .2.1978 and it was held that there was no lockout declared by the
first respondent-Company. Meanwhile, on 18.12.1974, pursuant to the
Karnataka Electricity Undertaking (Acquisition) Act, 1974, the management of
the first respondent, Amalgamated Electricity Company Ltd., was taken over
by the Karnataka Electricity Board whereby all the assets and liabilities of the   G
Amalgamated Electricity Company Ltd. vested with the Kamataka Electricity
Board. According to the workmen, 29 employees offered themselves to work
with the Kamataka Electricity Board, but they were not allowed to work. The
appellant, Karnataka Electricity Board, contended that these workers could
not be allowed to join duty in view of the then pending Industrial Dispute.
After the passing of the award in l.D. No. 1117 l, the workmen again made a        H
    698                    SUPREME COURT REPORTS (2000] SUPP. 5 S.C.R.

A demand that they must be permitted to join duty in the Karnataka Electricity
    Board. However, the workmen were not allowed to join duty and in view of
    the demand made by the workers, a fresh Reference was made as to whether
    the management of Mis Amalgamated Electricity Company Ltd., Belgaum and
    the Karnataka Electricity Board, were justified in refusing employment to the
B   29 workmen named therein, with effect from 25.3.1971. The Industrial Tribunal
    at Hubli passed its award on 6.3.1991. It held that except one worker, K.S.
    Shinde, who was in gainful employment elsewhere, all other workers were
    entitled to reinstatement and 50% of the back wages from 7 .10.1978 till their
    reinstatement.

C         The award of the Industrial Tribunal was challenged before the High
    Court and the learned Single Judge refused to interfere with the award. In an
    appeal filed against the judgment of the learned Single Judge, the Division
    Bench also refused to interfere with the award passed by the Tribunal. Hence
    these appeals.

D          We heard the learned counsel for the appellant, Karnataka Electricity
     Board and also the counsel for the first respondent-Company. Learned counsel
    for the appellant contended that in view of the earlier Reference, namely, l.D.
     11/71, the second Reference was wholly unnecessary and as it was on the
    same subject matter, the general principles of res judicata would apply.
E   Therefore, he contended that the award passed in l.D. 32/86 is not enforceable
    in law. The 29 workers were admittedly the workers of the Amalgamated
    Electricity Company Ltd., which was engaged in the supply of electricity in
    Belgaum. The counsel for the appellant contended that there was an illegal
    strike and despite the offer made by the appellant, the workers refused to join
    duty. The learned counsel for the workmen, on the other hand, contended that
F   there was an illegal lockout and in spite of the fact that these workers were
    willing to work, they were denied employment from 25.3.1971 onwards.

          In the Reference under l.D. No. 11/71, the dispute was whether there
    was a lockout or not by the first respondent-Company and it was held that
G   there was no lock-out as alleged by the workmen. It may be noted that the
    workmen were not allowed to work right from 25.3 .197 I. Some of the workers
    were transferred and some of them are alleged to have been dismissed from
    service. Therefore, the dispute continued, and in the Second Reference, i.e.
    in l.D. 32/86, the question for consideration was whether the Amalgamated
    Electricity Company or its successor-in-interest, Karnataka Electricity Board,
H   was justified in refusing employment to the workmen.
K p T CORPN. LTD. v AMALGAMATED ELEC. ro LTD. [KG llALAKRISHNAN.J] 699

      We do not think that the subsequent Reference under l.D. 32/88 had         A
anything to do with the earlier Reference made as l.D. 11/71. The second
Reference was warranted in view of the stand taken by the Amalgamated
Electricity Company and the Karnataka Electricity Board that these workmen
were not entitled to join duty. Therefore, we do not think that the principles
of res judicata have· got any application in the instant case.
                                                                                 B
      It was further contended that there was a delay of several years in
raising the dispute and, therefore, the Tribunal should not have directed
reinstatement of all these workers. It was also contended that at the time of
acquisition and taking over of the management of the Amalgamated Electricity
Company, these workmen were not the workers of the Amalgamated Electricity
Company and, therefore, the Kamataka Electricity Board has no legal obligation   C
to reinstate them in service.
       It is true that these workmen were not working in the Amalgamated
Company at the time when the management of the Company was taken over
on 18.12.1974 as they were illegally denied employment. Nevertheless, the
Company was legally bound to reinstate these workers as early as from D
25.3.1971. The award of the Tribunal shows that they were illegally denied
 employment with effect from 25.3.1971. When the Kamataka Electricity Board
took-over the management of the Amalgamated Electricity Company, these
workers made themselves available for work, but they were not allowed to join
 duty by the Kamataka Electricity Board. The entire assets and liabilities of E
the Amalgamated Electricity Company were taken over by the Karnataka
 Electricity Board. Even as per Section 25 FF of the Industrial Disputes Act,
 1947, where the ownership or management of an undertaking is transferred,
whether by agreement or by operation of law, from the employer in relation
to that undertaking to a new employer, every workman who has been in
continuous service for not less than one year in that undertaking immediately F
before such transfer shall be entitled to notice and compensation in accordance
with the provisions of Section 25 F thereof. These workers were not paid any
such compensation as per Section 25 F. Their services should be deemed to
have been not interrupted by such transfer. Had the Amalgamated Electricity
Company Ltd. been functioning in Belgaum, the said Company would have G
been legally bound to engage these workers as their workmen by virtue of
the award passed by the Tribunal. The Kamataka Electricity Board being the
successor-in-interest is bound to reinstate these workers as per the award
passed by the Tribunal.

     In the instant case, the workmen sought reference of the dispute long       H
    700                     SUPREME COGRT REPORTS [2000] SUPP. 5 S.C.R.

A   after it arose between the parties. Therefore, the appellant Kamataka Electricity
    Board contended that the workers should not be allowed back-wages. It was
    also pointed out that this Court in similar cases had even awarded back wages
    only upto 25%. In the instant case, the back wages have been directed to be
    paid from 7.10.1978 till the date of reinstatement. Many of the employees have
    now crossed the age of superannuation and only few remain to be reinstated.
B   Having regard to the facts and circumstances of the case, payment of 40%
    of back wages would meet the ends of justice. We are told that out of 29
    workers, 8 persons have died. One K.S. Shinde, S. No. 28 in the Statement
    showing the service particulars of the respondent-workmen, was in gainful
    employment and held not entitled to get the back wages.
c          Having regard to these facts, we direct the appellant, Karnataka
    Electricity Board to reinstate M.Y. Lohar (S.No. 8); P.P. Karadi (S.No. 10); K.S.
    Khade (S.No. 14); K.B. Chavan (S.No. 18); Prakash J. Naik (S.No. 19); P.P. Patil
    (S. NO. 20); B.S. Tamhankar (S.No. 21) and Pratap P. Jamadar (S.No. 22) in
    service within a pt:riod of one month. In the case of P. F. Gawali (S.No. 23)
D   the claim for reinstatement is not pressed. The appellant, Kamataka Electricity
    Board is also directed to give back wages to these employees at the rate of
    40% from 7.10.1978 till their reinstatement.

           Out of the 29 workers have either retired or died. We direct that legal
    representatives of the deceased workers are entitled to get back wages till the
E   respective dates of death of the deceased workers. The workmen who have
    retired shall be entitled to get back wages from 7. l0.1978 till the notional date
    of their retirement.

           The appeals are dismissed accordingly with no order as to costs.

F   B.S.                                                        Appeals dismissed.