SUNIL KR. GHOSH & ORS.versusK. RAM CHANDRAN & ORS.

                    [2011] 13 (ADDL.) S.C.R. 236


A                    SUNIL KR. GHOSH & ORS.
                                   v.
                    K. RAM CHANDRAN & ORS.
                (Civil Appeal Nos. 9921-22 of 2011)
                        NOVEMBER 18, 2011
B
         [P. SATHASIVAM AND J. CHELAMESWAR, JJ.]

          Industrial Disputes Act, 1947 - Workmen's rights in case
    of transfer of an undertaking - On facts, transfer of ownership
C of a factory to a new employer - Dispute between the
   Management and the workers - Application by Workers' Union
   to refer the dispute for adjudication, rejected by the
   Management - Thereafter, workers asking the Management
   for Voluntary Retirement Scheme (VRS) since they were not
o  interested in joining the new employer - However, the request
   not acceded to since the VRS introduced by the Management
  had lapsed - Writ petition by the workers - Direction by the
   Single Judge of the High Court tc, the Management for
  payment of retirement and retrenchment benefits to the
E workers - On appeal, held: Without consent, the workmen
  cannot be forced to work under different management and in
  that event, those workmen are entitled to retirement/
  retrenchment compensation in terms of the Act - Single
  Judge of the High Court was conscious of the fact that these
F workmen failed to aval1 the VRS within the stipulated time and
  also did not retire from the service - However, the workmen
  cannot be compelled to join the transferee company against
  their wish/consent and all along workers had been fighting for
  their cause in various forums - Also the Single Judge had
G passed the said order after hearing all the parties in the nature
  of mandatory directions to the Management - Thus, the
  Single Judge was justified in passing the order -Management
  directed to comply with the directions issued by the Single
  Judge of the High Court.

H                                236
SUNIL KR. GHOSH & ORS. v. K. RAM CHANDRAN & 237
                   ORS.
      P.I. Company introduced Voluntary Retirement A
Scheme (VRS) for its workmen in the year 1997. The next
year, the Company informed the workers about the
transfer of ownership of its factory to 'K' Company.
Appellant-workers filed an application under Section 10(2)
of the Industrial Disputes Act for referring the disputes B
for adjudication but the Labour Department, Government
of West Bengal refused to refer the same. The appellant-
workers asked for VRS from P.I. Company alleging that
they did not wish to join the new employer but the
request was turned down by the Company on the ground' c
that the VRS had lapsed in 1998. The appellant-workers
 filed a writ petition before the High Court challenging the
 refusal to refer and seeking direction for payment of VRS.
 The Single Judge of the High Court by order dated
 08.10.2001 disposed of th.e writ petition with a direction
                                                             0
 to the respondent-Management for payment of retirement
 and retrenchment benefits to the workers. The appellant-
 workers filed a contempt application alleging violation of
 the order dated 08.10.2001 and the same was dismissed.
 The appeal filed by the appellant-workers before the
 Division Bench of the High Court was also dismissed. E
 Therefore, the appellants filed the instant appeals.

    Allowing the appeals, the Court

     HELD: 1.1 Inasmuch as while rejecting the challenge     F
made to refer the matter for adjudication before the
Labour Court/Tribunal, the 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    G·
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.     H
    238   SUPREME COURT REPORTS [2011] 13 (ADDL.) S.C.R.


A It is true that the appellants-workers did not avail both the
    conditions. But at the same time, 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
B 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 a writ petition before the High Court. The
   Single Judge of the High Court took note of proposal for
c transfer between the respondents and Workers' Union
   and all other subsequent events including the fact that
   the Company launched VRS to its employees who did not
   opt to 'K' Company. After noting that the dispute was
  sought to be raised but the appropriate government
   declined to refer the same, the Single Judge, after
0
  considering the rival contentions of the workmen and the
  Management, declined to interfere with the impugned
  order therein and dismissed the same. However, the
  Single Judge, taking note of the fact that the workmen did
  not give their consent for change of management, issued
E a positive direction about the settlement of retirement
  benefits with effect from the date of approval of the
  undertaking to 'K' Company and directed the Company
  to pay all such retirement benefits payable to the
  employees as per normal rules and conditions of service
F including the retrenchment benefits within six months.
  The said order was passed as early as on 08.10.2001 and
  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. [Paras 8 and 9]
G [244-E-F; 245-A-E]

      1.2 Without consent, the workmen cannot be forced
  to work under different management and in that event,
  those workmen are entitled to retirement/retrenchment
H compensation in terms of the Act. In view of the same,
SUNIL KR. GHOSH & ORS. v. K. RAM CHANDRAN & 239
                   ORS.
the workmen are entitled to the benefit of such direction     A
and it is the obligation on the part of the Management, to
comply with the same. The 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            B
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, Single Judge was      c
 fully justified in passing such order. [Para 10) [245-F-H;
 246-A-B]

    1.3 A perusal of the directions passed by the Single
Judge leaves no room for doubt that a mandatory duty
was cast upon respondent Nos. 1 and 2 to comply with          D
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 nor retrenched from service, as
such, there is no question of any payment or to comply        E
with the directions passed by the Single Judge. [Para 11)
[246-8-C]

     1.4 The entire genesis of the contempt application
pertains to violation of order dated 08.10.2001 passed by     F
the Single Judge of the High Court. The said order was
passed by the Single Judge after hearing all the parties
in the nature of mandatory directions to respondent Nos.
'i and 2. The High Court in the impugned order, instead
of dismissing the contempt application ought to have          G
directed the respondents to implement the order dated
08.10.2001 passed by the Single Judge. [Para 12) [246-
 D-E]

      1.5 The appellants-workmen have made out a case
 for interference by this Court. Thus, the respondent are     H
     240   SUPREME COURT REPORTS (2011] 13 (ADDL.) S.C.R


 A directed to comply with the directions made by the Single
   Judge, within the stipulated period. [Para 13] (246-F-G]

        CIVIL APPELLATE JURISDICTION : Civil Appeal No.
    9921-9922 of 2011.

B       From the Judgment & Order dated 25.08.2008 of the High
    Court at Calcutta in M.A.T. No. 519 of 2008 and order dated
    20.06.2008 of the Contemt Court in C.P.A.N. No 539 of 2002.

        Collin Gonsalves, Hiren Dasan, Dhirendra Kr. Mishra,
c   Suvendu S. Dash, Sarla Chadra for the Appellants.

        Jay Savla, S. Singh, Renuka Sahu, Rameshwar Prasad
    Goyal, M.V. Deshmukh, Srikanth R. Deshmukh for the
    Respondents.

D       The Judgment of the Court was delivered by

        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
E 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.

F       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
G 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
H
SUNIL KR. GHOSH & ORS. v. K. RAM CHANDRAN & 241
           ORS. [P. SATHASIVAM, J.]
India Limited, a subsidiary of Videocon International Ltd. as a 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 B
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 Industrial Disputes
Act, 1947 (in short 'the Act') for referring the dispute to Court c
 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     D
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     E
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       F
Court on 15.10.1999. Against the same, Review Petition No.
1585 of 1999 was filed which was also dismissed.
     (c) On 22.12.1999, both the Company and Kitchen
Appliances India Ltd. issued a notice informing the G
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 H
ownership and the terms and conditions of services will not
     242   SUPREME COURT REPORTS [2011] 13 (ADDL.) S.C.R


A 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
B 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)
c at Sealdah in Title Suit No. 795 of 1999.
        (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
D 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
E 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
F 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.
G
        (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
H respondent Nos. 1 & 2 -Management.
SUNIL KR. GHOSH & ORS. v. K. RAM CHANDRAN & 243
           ORS. [P. SATHASIVAM, J.]
    5. The point for consideration in these appeals is whether   A·
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 8
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 C
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
Kitchen Appliances India Ltd. Pursuant to the said transfer, 311 D
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 E
 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
 raquest was turned down by the Company on the ground that
',he VRS lapsed even in October, 1998, challenging the refusal F
 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 G
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
 J8.10.2001, it is useful to refer to the directions made therein.
While declining to interfere with the order of rejection made for H
     244 SUPREME COURT REPORTS (2011] 13 (ADDL.) S.C.R

A 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
B        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
c        approval.
               With the aforesaid observations, this writ application
         is disposed of."
        8. It is not in dispute that the order was passed by the
D 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
E 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
  the Labour Court/Tribunal, the learned single Judge, in order
F 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
G 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
H several remedies such as filing a suit, making representation
SUNIL KR. GHOSH & ORS. v. K. RAM CHANDRAN & 245
           ORS. [P. SATHASIVAM, J.]
to the Management as well as to the officers of the Labour A
Department for consultation and consideration and finally tq 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 B
between Philips India Ltd. and Workers' Union and all other
subsequent events including 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 c
 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 0
 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 E
  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,     F
those workmen are entitled to retirement/retrenchment
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            G
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     H
    246    SUPREME COURT REPORTS [2011] 13 (ADDL.) S.C.R


A 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.
B      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 conter.d that since the
C appellants-workmen had neither been retired nor resigned 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.
D      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,
E 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
F 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
G date of the receipt of this judgment.
        14. The civil appeals are allowed on the above terms. No
    order as to costs.
    N.J.                                        Appeals allowed.
H