Sunday, July 18, 2010


REPORTED IN (2010 I LLN 240)

Chennai High Court


DATED : 18-8-2009




The Management of Ultramarine and Pigments Ltd.,


Ranipet. ... Petitioner


1. The Presiding Officer,

Labour Court, Vellore.

2. R. Narasimhan ... Respondents

Writ Petition filed under Article 226 of the Constitution of India praying for the issuance of a Writ of Certiorari calling for the records of the first respondent in I.D.No.431/94 and quash the award dated 4.1.2001.

For Petitioners : Mr.Ravi

for M/s.T.S.Gopalan & Co.,

1st Respondent : Labour Court

For 2nd Respondent : Mr.R.Rajaram


The prayer in this writ petition is to quash the award made in I.D.No.431 of 1994 dated 4.1.2001 on the file of the Labour Court, Vellore.

2. The case of the petitioner-management as could be seen from the affidavit in support of the writ petition are as follows:

(a) The second respondent was employed as Supervisor in the petitioner Soap Factory at Ranipet. During April, 1999, the management placed orders with the manufacturers at Mumbai for supply of certain machineries in connection with the expansion of the manufacturing activities at Ranipet. According to the petitioner, the second respondent was involved in various manufacturing activities in the factory and in order to ensure proper execution of the work order given to the manufacturer at Mumbai, and also to survey and inspect the machineries, the management decided to send competent technicians to Mumbai for certain period. (b) The second respondent and two others were found fit for the above job and on 2.8.1994 they were issued with orders deputing them to Mumbai. The second respondent was required to report before the petitioner's Mumbai office Manager on or before 8.8.1994. (c) It is claimed in the affidavit that the second respondent refused to accept the said order and sent a letter on 8.8.1994 by stating that he was working in the factory at Ranipet for the past seven years and as per the Model Standing Orders, there was no provision to transfer employees like him, who are paid consolidated salary and it is not possible for him to maintain his family at Ranipet, while staying at Mumbai and therefore he requested to post him at Rnipet itself. (d) The management sent a reply stating that as per clause 6 of the order of appointment, the second respondent is liable for transfer anywhere in India and the second respondent was sent for the purpose of inspection and survey the equipments and directed the second respondent to report at Mumbai. (e) Again, the second respondent sent a letter on 16.8.1994 and objected the said transfer and requested to permit him to work at Ranipet. On 20.8.1994, the management once again directed the second respondent to report at Mumbai, failing which he would be liable for disciplinary action. (f) The second respondent having not reported for duty at Mumbai, a show cause notice was issued on 23.8.1994, calling upon the second respondent as to why he should not be dismissed from service for his refusal to attend to work at Mumbai. The second respondent sent a reply on 29.8.1994 and reiterated his stand. As the second respondent refused to obey the transfer order, on 30.8.1994 he was discharged from service. The second respondent raised I.D.No.431 of 1994 before the first respondent by contending that he was victimised for his Trade Union activities and prayed for reinstatement with backwages and continuity of service. The management filed counter statement and denied the same.

3. Before the Labour Court, the second respondent examined himself as a witness and marked 26 exhibits on his side. On behalf of the management, the then Works Manager was examined as MW-1 and Exs.M-1 to M-53 were marked. The Labour Court, by award dated 4.1.2001, directed the petitioner management to reinstate the second respondent with backwages and continuity of service with cost of Rs.1,000/-.

4. The said award passed by the first respondent-Labour Court is challenged in this writ petition on the ground that the appointment order given to the second respondent empowers the management to transfer him and the second respondent having failed to obey the transfer order, he was discharged from service. It is also contended in the affidavit that transfer being an incidence of service and the management having discharged the second respondent for disobedience of the transfer order, the Labour Court was not justified in setting aside the said order and ordering reinstatement with all benefits.

5. The learned counsel for the management during the course of the arguments submitted that he is not pressing the first issue raised before the Labour Court with regard to the maintainability of the Industrial Dispute and the second respondent can be treated as a Workman as he was not having any managerial/administrative powers. The said submission made by the learned counsel for the management is recorded. Insofar as the other issue as to whether the second respondent can be transferred to any other place and the said transfer power having been vested with the management in terms of the appointment order and the second respondent having been deputed to Mumbai and the said order having not been obeyed, the management was left with no option except to discharge the second respondent's service. The learned counsel also submitted that there is no victimisation and therefore the interference made by the Labour Court on that ground is perverse and the same can be interfered with by this Court. The learned counsel for the petitioner management made an alternate submission to award compensation in case this Court finds that the order of the Labour Court is sustainable.

6. The learned counsel for the second respondent submitted that on 8.5.1995 the Union was formed and the second respondent was elected as Executive Member of the Union and he being a low paid employee, namely Shift Supervisor, was ordered to be transferred to Mumbai due to his Union activities along with three other persons. The learned counsel further submitted that one person who was transferred to Mumbai, on being resigned from the Union membership, was retained at Ranipet. The learned counsel also submitted that the second respondent was not competent to inspect the machineries to be purchased by the management as he is only a B.Sc. Chemistry graduate and was given training only in mixing of chemicals for the manufacture of soaps/surf and the Ranipet factory is manufacturing Sunlight Bar Soap and Vim Bar soap and Surf/Vim powder for the multi-national company called 'Hindustan Lever' and that he has no technical expertise to find out the working of the machineries, etc. Insofar as the contention of the management that the order of transfer was temporary and for a limited period, it was argued that no period is mentioned in the transfer order and no special allowance was also sanctioned. According to the learned counsel, the Labour Court found that there was victimisation on the part of the management and without conducting any enquiry, the second respondent was discharged from service, and taking note of the above facts the award was passed in favour of the second respondent and there is no perversity in the said findings.

7. I have considered the rival submissions of the learned counsel for the petitioner as well as second respondent.

8. The second respondent was appointed in the petitioner Soap Manufacturing Company by order dated 14.7.1988 and he was designated as Packing Supervisor. In the order of appointment it is stated that the second respondent agreed to serve in any of the petitioner's sister concern/branches/subsidiaries within the territory of India. Even according to the petitioner-management, there is no branch or subsidiary office available at Mumbai to manufacture soap or detergent, for posting the second respondent as Packing Supervisor.

9. The reason stated for transferring the second respondent was to survey the equipments under manufacture by the suppliers. It is the specific case of the second respondent that he being a B.Sc Chemistry graduate, was trained only for the manufacture of soaps i.e., mixing of chemicals and he is not well-versed or trained to inspect and survey the equipments/machineries.

10. It is not in dispute that he became the Executive Committee member of the newly formed Trade Union, which was formed on 8.5.1994. Ex.W-6 was marked by the second respondent to prove the same. The Office bearers of the Trade Union viz., the second respondent and two others were transferred/deputed to Mumbai office. It is admitted by the management witness No.1 during cross-examination deposed that the second respondent and two others were deputed/transferred and all the three persons failed to report for duty at Mumbai. One P.Sivakumar, who was also deputed to Mumbai, on being resigned from the membership of the Union, was allowed to serve at Ranipet. The second respondent has filed Ex.W-4 dated 8.5.1994 in support of his contention that the Employees' Union was formed and a resolution copy has been marked. The learned counsel for the petitioner management submitted that in the transfer order, the second respondent was offered special pay, however, the transfer order dated 2.8.1994 which is marked as Ex.M-11 nowhere states that special pay is ordered to the second respondent, while he was ordered to report for duty before the Mumbai Office Manager. The only thing stated in the said order is that he can collect advance of Rs.450/- for travelling and other expenses on suspense account. Thus, the contention raised by the management stating that the second respondent was offered additional or special pay, while he was deputed to Mumbai office is untenable. Admittedly, the second respondent was paid a sum of Rs.1,400/- per month and he has expressed his inability to reside at Mumbai, while retaining his family at Ranipet.

11. It is also claimed by the petitioner management that the deputation/transfer was for a limited period. From the perusal of the transfer order dated 2.8.1994 (Ex.M-11), it is clear the period of deputation/transfer is not mentioned. For proper appreciation, the transfer order dated 2.8.1994 is extracted hereunder, "ULIRAMARINE & PIGMENTS LIMITED,




Junior Shift Supervisor

We understand from our suppliers at Bombay that the equipments for which we have placed orders are getting ready and they have advised us to make arrangements for stage by stage inspection of the equipments. We have decided to depute the three of your viz. (1) Mr.B.Sivakumar, (2) Mr.G.T.Sivakumar (3) Mr.R.Narasimhan, to Bombay to inspect and survey the equipments under manufacture and fabrication by our suppliers. Further instructions in this regard will be given to your by our Bombay office when your report there. You are requuired to report to our Bombay office Manager Mr.V.R.Manohar, on or before 8.8.94. In view of this, you may collect your advances from the company and get relieved on Wednesday the 3rd August, 94. Each of you may collect Rs.450/- for your travelling and other expenses on suspense account. You may render proper account to our Bombay office." It is not disputed by the management that M/s.B.Sivakumar, G.T.Sivakumar and the second respondent herein were transferred/deputed to Mumbai and all the above persons are members of the Union. Admittedly no other non-member of the Union have been deputed/transferred to Mumbai.

12. Taking note of the above undisputed facts, the Labour Court recorded its findings that there is victimisation by the management and the second respondent was discharged from service with unduly haste with clear determination of mind, without conducting any enquiry. The Labour Court also found that compensation in lieu of reinstatement will not be the adequate relief as it will give wrong signal to other employers to victimise their employees. The Labour Court also found that the second respondent proved that he was not gainfully employed during his non-employment period and consequently ordered reinstatement with backwages and continuity of service. There is no perversity in the findings given by the Labour Court, warranting interference under Article 226 of the Constitution of India.

13. The contention of the learned counsel for the petitioner-management that the second respondent having been appointed in a transferable post, is bound to report for duty at Mumbai, when he was given order of transfer/deputation. The Labour Court gave a finding that the Mumbai Office may not be a branch office as there was no manufacturing process carried on, and it is only an administrative office and therefore the second respondent, who was selected as Packing Supervisor, has no duty to perform in the administrative office at Mumbai.

14. Though transfer is an incidence of service, taking into consideration the facts and circumstances of this case, where there is no manufacturing process carried on at Mumbai, the transfer order issued to the second respondent cannot be treated as an order of transfer simplicitor. The management also cannot sustain the order on the ground of exigency in service, particularly, when it is established before the Labour Court that only three persons, who became office bearers of the Union alone were transferred to Mumbai administrative office.

15. The alternate submission made by the learned counsel for the petitioner-management that the second respondent may be given a lumpsum in lieu of reinstatement also cannot be sustained in view of the fact that the second respondent has not involved in any misappropriation or committed any delinquency and thereby the management lost its confidence on him. In the counter statement filed before the Labour Court, though a plea is raised that the management had lost confidence on the second respondent, the said plea was not proved by any acceptable evidence before the Labour Court and the Labour Court having came to the conclusion that there is victimisation on the part of the management, as rightly observed by the Labour Court, if the alternate plea of compensation in lieu of reinstatement is ordered, it will give wrong signal to the managements to discharge/dismiss their employees, who are genuinely ventilating their grievance to get their statutory rights and benefits according to the Labour Welfare Legislations.

16. In the decision reported in (1975) 1 SCC 574 : 1975 (1) LLJ 262 (L.Michael v. M/s.Johnson Pumps India Ltd.) in paragraphs 19, 21 and 22 (in SCC) it is held thus,

"19. ................ The law is simply this: The Tribunal has the power and, indeed, the duty to X-ray the order and discover its true nature, if the object and effect, if the attendant circumstances and the ulterior purpose be to dismiss the employee because he is an evil to be eliminated. But if the management, to cover up the inability to establish by an enquiry, illegitimately but ingeniously passes an innocent-looking order of termination simpliciter, such action is bad and is liable to be set aside. Loss of confidence is no new armour for the management; otherwise security of tenure, ensured by the new industrial jurisprudence and authenticated by a catena of cases of this Court, can be subverted by this neo-formula. Loss of confidence in the law will be the consequence of the Loss of Confidence doctrine.

20. ......................................

21. ................. We are constrained to express ourselves unmistakably lest industrial unrest induced by wrongful terminations based on convenient loss of confidence should be generated.

22. Before we conclude we would like to add that an employer who believes or suspects that his employee, particularly one holding a position of confidence, has betrayed that confidence, can, if the conditions and terms of the employment permit, terminate his employment and discharge him without any stigma attaching to the discharge. But such belief or suspicion of the employer should not be a mere whim or fancy. It should be bona fide and reasonable. It must rest on some tangible basis and the power has to be exercised by the employer objectively, in good faith, which means honestly with due care and prudence. If the exercise of such power is challenged on the ground of being colourable or mala fide or an act of victimisation or unfair labour practice, the employer must disclose to the Court the grounds of his impugned action so that the same may be tested judicially." In the decision reported in (2001) 9 SCC 609 (Kanhaiyalal Agrawal v. Factory Manager, Gwalior Sugar Co. Ltd.) the question with regard to loss of confidence by employee was considered. In paragraph 9 it is held as follows: "9. Substantial contention on the merits of the case by the employer in these appeals is that the finding of loss of confidence in the employee by the Labour Court has been reversed in appeal by the Industrial Court on unreasonable grounds. What must be pleaded and proved to invoke the aforesaid principle is that (i) the workman is holding a position of trust and confidence; (ii) by abusing such position, he commits acts which results in forfeiting the same; and (iii) to continue him in service would be embarrassing and inconvenient to the employer or would be detrimental to the discipline or security of the establishment. All these three aspects must be present to refuse reinstatement on the ground of loss of confidence. Loss of confidence cannot be subjective based upon the mind of the management. Objective facts which would lead to a definite inference of apprehension in the mind of the management regarding trustworthiness or reliability of the employee must be alleged and proved. Else, the right of reinstatement ordinarily available to the employee will be lost."

17. The plea raised by the learned counsel for the petitioner that the second respondent was temporarily posted/deputed to Mumbai also cannot be sustained in the absence of any such reason stated in the order of transfer, which is extracted above.

18. It is well settled in law that transfer order can be interfered with only when any statutory violation or mala fide or victimisation is proved. Here in this case, the victimisation is proved before the Labour Court and the management has also shown undue hasteness in discharging the second respondent, without even conducting any enquiry by framing regular charges. The attempt made before the Labour Court to sustain the order of discharge was rightly rejected by the Labour Court.

19. On the basis of the above findings, I hold, no case is made out to interfere in the award passed by the Labour Court, warranting interference.

The writ petition is dismissed. No costs.



The Presiding Officer, Labour Court,


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