Holding

The appellant is bound to accept the respondents as permanent employees; treating them as seasonal or temporary amounts to an unfair labour practice, and the complaints fall within Items 6 and 9 of the Act, not Item 1.

Summary

The Maharashtra Government transferred the cotton‑related activities of the Maharashtra State Cooperative Marketing Federation to a newly formed Maharashtra State Cooperative Cotton Growers Marketing Federation. Employees who had been declared permanent by an industrial award of the Marketing Federation claimed that the new federation should recognise them as permanent employees, but were instead treated as seasonal/temporary staff. The Industrial Court dismissed their complaints, holding they fell under Item 1 of Schedule IV of the Maharashtra Recognition of Trade Unions and Prevention of Unfair Labour Practices Act, 1971 and were barred by limitation. The High Court set aside that order, and the Supreme Court affirmed the High Court, holding that the complaints fall within Items 6 and 9, the award is binding on the successor employer, and the appellant’s refusal to absorb the workers constitutes an unfair labour practice. The Court also ruled that the limitation defence was untenable without giving the respondents a chance to explain the delay.

Issues considered

The proper categorisation of the respondents' complaints under Schedule IV of the Maharashtra Recognition of Trade Unions and Prevention of Unfair Labour Practices Act, 1971 (Items 6/9 vs. Item 1).
Whether an industrial award declaring employees permanent binds a successor organization formed by transfer of assets and staff.
Whether the limitation period bars the complaints and, if so, whether the Industrial Court was required to afford the respondents an opportunity to explain the delay.
Whether the appellant’s refusal to absorb the employees as permanent staff amounts to an unfair labour practice.

Legislation cited

Subjects

unfair labour practicepermanent employeeindustrial awardlimitation periodjurisdiction of industrial courtsuccessor employerMaharashtra Recognition of Trade Unions Acttransfer of employeesseasonal staff

Judgment

MAHARASHTRA STATE COOPERATIVE COTTON
A
GROWERS MARKETING FEDERATION LTD.
v.
SHRIPATI PANDURANG KHADE & ORS. ETC.

OCTOBER 11, 1988
B
[MURARI MOHON DUTT ANDS. NATARAJAN,JJ.]

Maharashtra Recognition. of Trade Unions and Prevention of
Unfair Labour Practices Act, 1971-Section 5 (d)-Duty of Industrial
Court to decide complaints relating to unfair labour practices except
those falling in item 1 of Schedule IV of the Act. ·
c
Maharashtra Recognition of Trade Unions· a.nd Prevention of
Unfair labour Practices Act, 1971-Unfair Labour Practice-What
is-An industrial award declared employees permanent-Appellant
treated them as seasonal or temporary employees. Held~Amounts to
D unfair labour practice.

Industrial Court-Duty of-Must give an opportunity co appli-
cants to explain the delay if the complaints are barred by limitation.

The respondents were earlier the employees of an organisation
E called the ..Maharashtra State Cooperative Marketing Federation
Limited (Marketing Federation). Later a new organisation namely the
Maharashtra State Cooperative Cotton Growers Marketing Federation
Ltd., the appellant herein, was formed and some of the activities of the
Marketing Federation were assigned to it. By letter dated 10th August,
1984, the Government directed the Marketing Federation that the
F Services of the seasonal staff should be terminated and those of the
regular staff be placed at tbe disposal of the new organisation. As the
Marketing Federation and the appellant failed and neglected to give
them the permanent status, the respondents made a complaint before
the Industrial Court complaining of unfair labour practices on· the part
of the Marketing Federation as also the appellant herein as contained in
G Items 6 and 9 of the Schedule IV of the Act. The workers stated that
even when there was an award in their favour by the Industrial
Tribunal declaring them as permanent employees, yet the Marketing
Federation and the appellant did not give them the status of permanent
employees. The Industrial Court took the view (i) that the complaints
made by the respondents did not come under items nos. 6 and 9 but they
H cam~ under item No. l and as such he could not decide the complaints in
472
STATE COOPERATIVE COTTON v. S.P. KHADE 473

view of section S(d) of the Act, (ii) that there was no unfair labour
A
practice on the part of the Marketing Federation or the appellant, and
(iii) that the complaints were barred by limitation. The Industrial Court
dismissed the complaints of the respondents. Feeling aggrieved the
respondents filed writ petitions before the High Court and the same
were allowed. Hence these appeals by special leave. The appellant con-
tended that the award of the Industrial Court was not binding on them. B
Dismissing the appeals, this Court,

HELD: In view of.the Award, it must be held that the respon-
dents were the permanent employees of the Marketing Federation, and
that after the constitution of the appellant and the transfer of"the
employees of the Marketing Federation to the appellant, the appellant
was bound to accept the respondents as permanent employees and not c
to treat them as seasonal employees or temporary employees. This act
on the part of the appellant amounts to unfair labour practice. [476E-F]

There is no justification for the finding of the Industrial Court
that the complaints made by the respondents do not come within the D
purview of Items Nos. 6 and 9 of the Schedule IV of the Maharashtra
Recognition of Trade Unions and Prevention of Unfair Labour
Practices Act, 1971. No reason has been given by the Industrial Court
why the complaints come within Item No. 1 of Schedule IV and, as such,
can be decided only by the Labour Court and not by the Industrial
Tribunal. The complaints made by the respondents are clear and E
specific and there was no scope for categorising them as complaints
under Item No. 1 of Schedule IV. [476G-H; 477]

It has been assumed by the Industrial Tribunal that the respon-
dents came to now that they were being appointed as seasonal
employees on the respective dates of their appointment letters. There is, F
however, no material on record to show on what dates the appointment
letters were served on the respondents. In the circumstances, the
Industrial Court was not at all justified in holding that the complaints
filed by the respondents were barred by limitation. Even assuming that
the complaints were barred by limitation, as held by the Industrial
Court, the Industrial Court should have given an opportunity to the G
respondents for explaining the delay. No such opportunity has been
given to the respondents. Accordingly, this Court is unable to subscribe
'to the view of the Industrial Court that the complaints filed by the
respondents were barred by limitation. 'l477B-O]

CIVIL APPELLATE JURISDICTION: Civil Appeal No. 3719- H
3721 of 1988.
474 SUPREME COURT REPORTS [1988] Supp. 3 S.C.R.

A From the Judgment and Order dated 9/ 10.3.1987 of the Bombay
High Court in W.P. Nos. 620, 622 and 621of1986.

G. Ramaswamy, Additional Solicitor General and A.M.
Khanwilkar for the Appellant.

B Dr. R.S. Kulkarni, Jitender Sharma, D.M. Nargolkar and
A.S. Bhasme for the Respondents.

The Judgment of the Court was delivered by

DUTT, J, Special leave is granted. Heard learned Counsel for
C the parties.
These appeals preferred by the appellant, the Maharashtra State
Cooperntivc Cotton Growers Marketing f'ederotion Ltd., nre directed
against the judgment of the Bombay High Court whereby the High
Court allowed the writ petitions of the respondents and quashed the
D order of the Industrial Court Maharashtra (Kolhapur Bench),
Kolhapur, dl~misslng tho complaints filed by tho respondents.

The Government of Maharashtra appointed the Muharnshtra
State Cooporotlve Marketing Federation, horeinaft~r referred to llS
"the Marketing Federation", the Chief Agent in the Cotton Monopoly
E Scheme under the provision of section 42 of the Maharashtra Raw
Cotton (Procurement Process of Marketing) Act, 1971. The activities
of the Marketing Federntion extended to various ngrlculturnl produce
including foodgrains. In Februory, 1984, the Government carved out
the operation of the, levy of cotton from the other activities of the
Marketing Federation and assigned them to another society, namely,
p the Maharashtrn State Cooperative Cotton Growers Marketing
Federation Ltd., the appellant in all these appeals. By its order dated
August 10, 1984, the Government directed the Marketing Federation
to take the following actions:
"(i) In respect of the Staff working under the Co.tton
0 Monopoly Scheme at present, the Services of•thc seasonal
staff working, If any, should be terminated with immediate
effect and in any case not later than lSth August, J984.
I
(Ji) So far as the regular staff Is concerned, it Is proposed
that tho services of the staff working in tho Cotton Depart·
H «
ment of tho Federation at Bombay and in the Mofussil
" " " ' " """''""" . ., - ',... - ' - - ~~
STATE COOPERATIVE COTTON v, S.P. KHADE !DUTT, J,J 475

areas would be placed at the disposal of the new Organisa· A
tion on "as is where is basis" as on 1st July, 1984."
'
In a subsequent letter dated September 8, 1984 the Marketing
Federation was directed to effect the transfer of the chief agency from
the Marketing Federation to the appellant, Inter alla, by transferring
all the assets and liabilities under the scheme account and the cash and B
Bank balance at Bombay and Mofussil under the scheme account as
well as under the non-scheme account to the appellant etc.

The respondents claimed that they were permanent employees of
the Marketing Federation and in view of the directions contained ln
the said letter dated August 10, 1984 of the Government, the appellant C
should have appointed them on a permanent basis and not as seasonal
employees. The case of the respondents was that they had been in the
employment of the Marketing Federation since 1972 on monthly
salaries with annual Increments. Even though there wa1 on Award In
their favour by the fodustrial Tribunal declaring them os permanent
employees, yet the Marketing J' ~deratlon and the appellant failed D
and neglected to 11ive them the permanent status. Accordingly, they
mnde · complaints before the Industrial Court complaining of unfair
lnbour prnctlccs on tho part of the Marketln11 Fedcrallon as also on the
part of the appellant as contained In Items Nos. 6 and 9 of Schedule IV
to fhe Maharashtra Recognition of Trade Unions and Prevention of
Unfair Labour Practices Act, 1971. Items 6 and 9 are as follows: B

"Jtcms 6. To employ employee os "bad/ls'', casuals or
temporaries and to continue them as such for years, with.the
object of depriving them of the status and privileges of
permanent employees.
p
Item 9. Failure to Implement award, scttlomont or agree·
mcnt."

In this connection, we may refer to section 5(d) of the said Act
which provides that it shall be the duty of tho Industrial Court to
decide complaints relating to unfair Jabour practices except unfair o,
labour practices falling In Item 1of Schedule JV.

The Industrial Court took the view that' the complaints made by
the respondents did not come under Item Nos. 6 and 9, but they came
under Item No. 1 and, as such, It could not decide the complaints In
view of section 5( d). Further, It was held by the Industrial Court that H
---- "~
476 SUPREME COURT REPORTS [1988) Supp. 3 S.C.R.

A there was no unfair labour practice on the part of the Marketing Fedra-
tion or the appellant and that, in any event, the complaints were
barred by limitation as the same were filed beyond 90 days tro'm the
date of the knowledge of the respondents that they were appointed by
the appellant as seasonal employees. Upon the said findings, the
Industrial· Court dismissed the complaints of the respondents. Being
B aggrieved by the order of the Industrial Court, the respondents filed
writ petitions before the High Court and, as stated already, the High
Court allowed the writ petitions and quashed the order of the In-
dustrial Court. Hence these appeals.

It has been already noticed that under the Award~f the Indust-
rial Tribunal, the respondents were declared the permanent
c employees of the Marketing Federation. The appellant has prepared a
seniority list for the year 1985-86 which shows that most of the respon-
dents have been in the employment of the Marketing Federation since
1972. The said seniority list is Annexure 'D' to the writ petitions filed
by the respondents in the High Court. The annual increment list, also
D prepared by the appellant, shows that the respondents have been in
the service of the appellant on monthly salaries and they were given
annual increments on November 1, 1985. In spite of the above facts,
the respondents have been shown in the seniority list and also in the
annual increment list as temporary employees. In our opinion, there
cannot he any doubt that there has been unfair labour practice on the
E p_art of the_!vlarke_ting Federation as also on the appellant bv continuing
them as temporary employees. We are unable to accept the contention
of the appellant that the Award is not binding on the appellant. In view
of the Award, it must be held that the respondents were the permanent
employees of the Marketing Federation, and that after the constitution
of the appellant and the transfer of the employees of the Marketing
F Federation to the appellant, the appellant was bound to accept the
respondents as permanent employees and not to treat them as seasonal
employees or temporary employees. This act on the part of the appel-
lant amounts to unfair labour practice.

We do not find any justification for the finding of the Industrial
G Court that the complaints made by the respondents do not come within
the purview of Items Nos. 6 and 9 of Schedule IV of the Maharashtra
Recognition of Trad~ Unions and Prevention of Unfair Labour
Practices Act, 1971. No reason has been given by the Industrial Court
why the complaints come within Item No. l of Schedule IV and, as
such, can be decided only by the L31bour Court and not by the Indust-
H rial TribunaL The complaints made by the respondents are clear and
.i

STAIB COOPERATIVE COTTON v. S.P. KHADE [DUTT, J.J 477

specific and ·there was no scope for categorising them as complaints
A
under Item No. 1 of Schedule IV.

With regard to the.question of limitation, the Industrial Tribunal
seems to think that as the appointment letters bear some dates in
October, 1984, the period of limitation will be computed from the
respective dates of the appointment letters. It has been assumed by the B
Industrial Tribunal that the respondents come to know that they we.re
being appointed as seasonal employees on the respective dates of their
appointment letters. There is, however, no material on record to show
on what dates the appointment letters were served on the respondents.
In other. _:-vords, there is nothing to -show when the respondents
received the appointment letters. In the circumstances, the Industrial
Court was not at all justified in holding that the complaints filed by the
c
respondents were barred by limitation. Even assuming that the
complaincs were barred by limitation, as held by the Industrial Court,
the Industrial Court should have given an opportunity to the respon-
dents for explaining the-delay. No such opportunity has been given to
the respondents. Accordingly, we are unable to subscribe. to the view D
of the Industrial Court that the complaints filed by the respondents
were barred by limitation.

Before parting with these appeals, we may dispose of a short
contention of the appellant. The learned Counsel for the appellant has
placed much reliance upon a letter of the Government dated E
November 9, 1984 giving some directions to the appellant, as con-
tained in paragraphs 1 and 2 of the said letter. Paragraphs 1 and 2 are
as follows:

"1. All staff recruited after 1st July, 1972 specifically for
the cotton scheme with prior approval of Government F
wherever necessary or where the Government representa-
tive was associated with the selection/appointment of the
candidates, should be immediately placed on deputation
without payment of Deputation Allowance to the Cotton
Growers' Marketing federation. Their salaries and al-
lowances will be payable from the scheme as part of the G
commission payable to the Cotton Growers' Federation till
1st January, i985.

2. The Cotton Growers' Federation Ltd. will finally
absorb the above categories of staff after scrutiny as on 1st
January, i985. Those out of the above staff who are not H
478 SUPREME COURT REPORTS (1988] Supp. 3 S.C.R.

A acceptable to the new Federation for some reason or the
other, and_so have to be retrenched, will be retrenched by
the Maharashtra State Cooperative Marketing Federation
Ltd. and the cost thereof would be debited to cotton .
scheme account"

B On the basis of the directions in paragraph 2 extracted above, it
is submitted on behalf of the appellant that the appellant is at liberty ·
not to absorb or accept the respondents in the appellant's concern.
This contention, in our opinion, is without any substance whatsoever.
There is a specific direction that the appellant shall finally absorb the
staff of the Mar!ceting Fedration after scrutiny as on January 1, 1985.
c The appellant cannot refuse to absorb or accept a permanent
employee of the Marketing Federation without any reason what·
soever. So far as the respondents are concerned, we do not find any
reason why the appellant should not accept them as its permanent
employees. The High Court has rightly directed the appellant and the
Marketing Federation to process the cases of the respondents on the
D basis that they have put in more than 240 days of service and grant
them all the benefits under the circular letter dated January 18, 1985;

For the reasons aforesaid, the judgment of the High Court is
affirmed and.the appeals are dismissed with one set ofcosts quantified
at Rs.s,ooo ·
E
l.\L:S.K. Appeals dismissed. ·