As per case facts, Vidyut Metallics Pvt Ltd (Petitioner) transferred its business to Supermax Personal Care Pvt. Ltd. (Respondent No. 2) after a fire incident. The petitioner contended that all ...
wp17274-25-J.doc
AGK
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
CIVIL APPELLATE JURISDICTION
WRIT PETITION No. 17274 OF 2025
Vidyut Metallics Pvt Ltd
Through its Authorised Representative
Mr. Ved Parkash
L.B. S. Marg, Teen Hat Naka,
Wagale Estate, Thane 400 6104… petitioner
Vs.
1.Vidyut Metallics Employees Union
Room No.301, Hema Apartment,
D Wing, Davale Nagar,
Near TMT Depot, Lokmanya Nagar
Pada No. 2, Thane-400 606.
2.M/s. Supermax Personal Care Pvt. Ltd
Malhotra House, 4
th
Floor, In front of
GPO, Mumbai-400 001. ...Respondents
Mr. Jamshed Cama, Senior Advocate with Mr. Sujeet
Salkar and Mr. Venkatesh Bhandari i/b Mr. Raymond
Gadkar, for petitioner.
Mr. Nitesh Bhutekar i/b Ms. Harshada Shrikhande, Mr.
Prathamesh Mandlik, Priyesha Patel, Mr. Aditya
Mahamiya, Ms. Sejal Singh and Mr. Khushal Ahirrao
for respondent No.1.
Mr. Ajinkya Kurdukar, for respondent No. 2.
1
ATUL
GANESH
KULKARNI
Digitally signed by
ATUL GANESH
KULKARNI
Date: 2026.05.07
11:50:14 +0530
wp17274-25-J.doc
CORAM :AMIT BORKAR, J.
RESERVED ON :APRIL 30, 2026.
PRONOUNCED ON:MAY 7, 2026
JUDGMENT:
1.The present petition is directed against the impugned Award
dated 28 April 2025, rendered by the Industrial Tribunal at Thane
in Reference (IT) No. 11 of 2014. The petitioner seeks to assail the
legality and correctness of the said Award and prays for the same
to be quashed and set aside on grounds urged in the petition.
2.The factual matrix giving rise to the present proceedings,
briefly stated, is that the petitioner is a company which was earlier
operating two manufacturing units in the Thane region. One unit,
namely Vidyut Metallics Pvt. Ltd., was engaged in the manufacture
of razor blades, while the other unit, being the PEECO Plant
situated at Wagale Industrial Estate, was engaged in the
manufacture of wax paper. On or about 2 May 2020, a major fire
occurred at the PEECO Plant, resulting in cessation of
manufacturing activities at the said unit. In view of the difficulties
faced by the petitioner in continuing its manufacturing operations,
including those at Vidyut Metallics Pvt. Ltd., the petitioner entered
into a Business Transfer Agreement dated 30 December 2020 with
respondent No. 2. The said agreement was made effective from 18
March 2021. By virtue of the said arrangement, the petitioner
transferred its entire running business to respondent No. 2 on a
slump-sale basis and on an “as is where is” condition, including
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employees, business records, assets and liabilities of every nature.
The only asset retained by the petitioner was the immovable
premises.
3.It is the case of the petitioner that upon execution of the
Business Transfer Agreement, it ceased to have any connection
with or control over the transferred business, which thereafter
came to be exclusively operated by respondent No. 2. It is further
stated that 31 workmen had instituted Complaint (ULP) No. 337
of 2012 seeking ex gratia payment from respondent No. 2. By an
order dated 13 November 2021, the Industrial Court directed both
the petitioner and respondent No. 2 to make payment jointly and
severally. Subsequently, four workmen, namely Tushar Shinde,
Vinod Panchal, Avinash Asadokar and Ayub Shaikh, filed
Complaint (ULP) No. 104 of 2014 claiming balance suspension
wages for the period from 3rd November 2011 to 2013. By order
dated 2 January 2021, the Industrial Court again held both the
petitioner and respondent No. 2 jointly and severally liable to
make the said payment.
4.The petitioner has placed reliance upon Clauses 1.1.8 and
6.2.4 of the Business Transfer Agreement to contend that all
liabilities pertaining to the business, including contingent
liabilities, stood transferred to respondent No. 2. Clause 1.1.8
defines “Business Liabilities” and provides for their transfer to the
transferee, who is made responsible for discharge of such liabilities
from the transfer date. It is further provided that respondent No. 2,
as transferee, shall comply with all applicable employment laws
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and shall be liable for all employee-related payments including
gratuity, bonus, and other statutory dues. On this basis, it is
contended that any relief of reinstatement with back wages, even if
granted, can only be enforced against respondent No. 2, which is
the entity presently carrying on the business. The petitioner asserts
that it has ceased business operations and therefore cannot be
directed to reinstate the workmen. It is further pointed out that
respondent No. 2 has been admitted into Corporate Insolvency
Resolution Process with effect from 11 January 2024, and the
concerned workmen themselves have lodged claims before the
Resolution Professional seeking recovery of substantial amounts
towards back wages and other dues. According to the petitioner,
this conduct clearly indicates that the workmen have recognized
respondent No. 2 as the entity liable for such claims.
5.It is further the case of the petitioner that upon execution of
the Business Transfer Agreement, as many as 1117 workmen,
including managerial personnel and members of Maharashtra
Rajya Rashtriya Kamgar Sanghatana, accepted employment with
respondent No. 2 by executing individual consent letters. However,
approximately 37 workmen, including the 31 concerned workmen
in the present petition, who were members of respondent No. 1
Union, declined to accept such employment despite repeated
requests. It is stated that these workmen were thereafter relocated
to the PEECO Plant at Thane, but they discontinued attendance
after a few days on what is described as untenable grounds.
Consequently, the petitioner terminated their services with effect
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from 11 July 2013 in accordance with law and paid retrenchment
compensation along with other statutory dues, which were
accepted by the workmen. The termination letters were sent by
registered post as the workmen refused to accept the same
personally.
6.The petitioner further contends that after transfer of the
business, only 37 workmen remained on its rolls at the relevant
time and therefore the statutory requirement of seeking prior
approval for retrenchment was not attracted. It is also urged that
though the concerned workmen are stated to have continued
notionally under the petitioner, in fact they were working at the
establishment of respondent No. 2 and were receiving wages and
statutory benefits from respondent No. 2. It is further averred that
certain actions relating to relocation and retrenchment were
undertaken by one of the Directors, namely, Mr. Chaudhary, during
a period when disputes existed regarding control of the Board of
Directors. The petitioner asserts that steps had been initiated to
remove the said Director through proceedings before the Company
Law Board, and subsequent orders upheld by higher courts
enabled restructuring of the Board. It is also contended that under
a Secondment Agreement, the control and supervision of the
concerned workmen vested with respondent No. 2, which paid all
their dues, and therefore the petitioner could not be regarded as
the employer in law. Despite this position, the respondent Union
issued a Charter of Demands dated 16 August 2013 seeking
reinstatement of the workmen.
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7.The petitioner has assailed the finding recorded by the
Industrial Tribunal to the effect that respondent No. 2 had not paid
the terminal dues to the concerned workmen. According to the
petitioner, this finding is contrary to the documentary evidence on
record, which clearly establishes that retrenchment compensation
and other dues were paid through cheques issued from the
accounts of respondent No. 2 and credited to the workmen. It is
contended that the Tribunal failed to properly appreciate this
evidence, rendering the impugned finding unsustainable and
perverse.
8.It is further stated that upon rejection of the demands raised
by the respondent Union, conciliation proceedings were
undertaken, culminating in a Reference order dated 25 February
2014. The respondent Union thereafter filed its Statement of
Claim, to which the petitioner filed its Written Statement. Upon
hearing the parties, the Industrial Tribunal partly allowed the
Reference by the impugned Award dated 28 April 2025. Being
aggrieved thereby, the petitioner has invoked the writ jurisdiction
of this Court.
9.Mr. Jamshed Cama, learned Senior Advocate appearing on
behalf of the petitioner, submitted that the impugned Award is
based substantially upon the testimony of a solitary witness
examined on behalf of the respondent Union. It is urged that in the
course of cross-examination, the said witness has made material
admissions to the effect that the concerned workmen had accepted
and encashed their terminal dues, that a large majority of the
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employees had voluntarily joined respondent No. 2, namely
SPCPL, that no coercion or undue pressure was exercised upon
them, and that the terminal benefits were duly credited to their
respective accounts. According to the petitioner, these admissions
strike at the very root of the findings recorded by the Tribunal and
render the Award perverse, inasmuch as the Tribunal was led to
believe that the respondent Union represented the majority of the
workforce, whereas in fact 1117 employees had joined SPCPL
under the recognized union MRRKS and only about 37 employees
remained affiliated with respondent No. 1 Union.
10.It was further submitted that in Complaint (ULP) No. 58 of
2011, the Industrial Court had already recorded a categorical
finding that the respondent Union had a negligible membership of
approximately 2.5 percent and consequently lacked locus to
espouse the cause of the workmen. In this background, the
acceptance by the Tribunal of the respondent Union’s claim of
majority representation is stated to be manifestly erroneous. It is
also contended that SPCPL, which has subsequently been admitted
into Corporate Insolvency Resolution Process under the Insolvency
and Bankruptcy Code, constitutes a necessary and proper party to
any industrial dispute arising after the transfer of the undertaking.
The fastening of liability solely upon the petitioner, namely VMPL,
despite the transfer of business under the Business Transfer
Agreement and despite SPCPL having assumed obligations towards
the workmen, is, according to the petitioner, legally unsustainable.
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11.Learned Senior Counsel further submitted that under the
Secondment Agreement executed between SPCPL and VMPL, the
concerned workmen continued to remain in the employment of
SPCPL, which exercised supervision and control over their work
and was responsible for payment of salary, provident fund, ESIC
contributions and other statutory benefits. It is contended that
VMPL was merely functioning as a nominal job-work contractor
and did not have the attributes of an employer in law. The contrary
finding recorded by the Tribunal, treating VMPL as the employer, is
therefore assailed as being contrary to the evidence on record and
vitiated by perversity. On these grounds, a prayer is made for
setting aside the impugned Award.
12.Per contra, Mr. Nitesh Bhutekar, learned Advocate appearing
on behalf of respondent No. 1 Union, opposed the petition and
submitted that there was no valid transfer of employment of the
concerned workmen from VMPL to SPCPL. It is contended that the
Notice dated 12 January 2011 clearly stipulated that transfer of
employment was conditional upon individual written consent of
each workman, and no alternative mode of transfer was envisaged
therein. It is an admitted position that the 31 workmen
represented by respondent No. 1 did not furnish such consent and,
therefore, their employment continued with VMPL. In the absence
of such consent, the petitioner cannot contend that the said
workmen stood automatically transferred to SPCPL. It is further
submitted that even the Business Transfer Agreement itself made
the transfer of employees subject to their individual consent.
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Reliance is placed upon the evidence of the petitioner’s own
witness, who has admitted that the services of all employees did
not automatically stand transferred to SPCPL, that the concerned
31 workmen continued to work with VMPL till the date of
termination, that VMPL remained their employer and paid their
wages, and that the workmen continued to work at the PEECO
Plant of VMPL even after execution of the BTA. On the basis of
such evidence, it is contended that the employer-employee
relationship between VMPL and the concerned workmen subsisted
till the date of termination.
13.It is further submitted that the justification sought to be
advanced by VMPL for termination of services on the ground of
absence of work is factually incorrect. The witness examined on
behalf of VMPL has admitted the existence of a Job Work
Agreement dated 18th March 2011 entered into between VMPL
and SPCPL, under which VMPL had agreed to provide job work to
SPCPL. The said witness has further admitted that under the terms
of the said agreement, VMPL had undertaken to provide
manpower, manufacture and dispatch products, supply additional
operative and technical staff, and had in fact employed personnel
for such purposes.
14.According to the respondent Union, the aforesaid admissions
clearly negate the plea of lack of work raised by VMPL. It is
contended that upon a comprehensive appreciation of the evidence
on record, the Tribunal has rightly concluded that the termination
was founded on incorrect and untenable reasons and is therefore
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unsustainable in law. It is further urged that the transfer of the
concerned workmen to the PEECO Plant was not a bona fide
administrative decision but was punitive in nature, intended to
penalize the workmen for refusing to consent to transfer of their
employment to SPCPL. The evidence on record indicates that the
said plant had been completely destroyed in a fire in 2010, that
there were no functional facilities or working conditions, that there
was no manufacturing activity, and that the plant was not
operational at the relevant time. It is therefore contended that
such transfer was an act of victimisation and constituted an unfair
labour practice.
15.The learned Advocate further submitted that the termination
orders dated 11 July 2013 were admittedly issued and signed by
one Mr. Subhash D. Chaudhary. However, the minutes of the
extraordinary general meeting dated 21 December 2012 record
that the said Mr. Chaudhary had been removed from the post of
Director of VMPL. This position is also stated to have been
admitted in the cross-examination of the petitioner’s witness, and
further corroborated by publication of notice of removal in a
newspaper dated 3 September 2014. It is therefore contended that
the termination orders issued by the said person were without
authority. No resolution authorising him to take such action has
been produced on record. The explanation sought to be offered
regarding a stay order of the Company Law Board has not been
substantiated by any documentary evidence. In these
circumstances, it is submitted that the Tribunal has rightly held
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that the termination was effected by an incompetent authority and
is therefore void ab initio.
16.It is further submitted that at the time when the termination
orders were issued, certain proceedings were already pending
before the Industrial Court and Tribunal, including Complaint
(ULP) No. 58 of 2011, Complaint (ULP) No. 80 of 2013 and
Reference (IT) No. 39 of 2012. It is pointed out that by an order
dated 18th February 2011 in Complaint (ULP) No. 58 of 2011,
VMPL had been restrained from altering the service conditions of
the concerned workmen. A similar direction was issued on 26 July
2013 in Complaint (ULP) No. 80 of 2013. Despite the subsistence
of these interim orders, the workmen were transferred to the
PEECO Plant, which was admittedly non-functional, and were
thereafter terminated on 11 July 2013.
17.It is contended that the action of VMPL in terminating the
services of the concerned workmen during the pendency of
industrial dispute proceedings, without obtaining prior approval as
required under Section 33(2) of the Industrial Disputes Act, 1947,
is in clear breach of the statutory mandate. Any alteration in
service conditions or termination effected during the pendency of
such proceedings, in violation of the embargo under Section 33(2),
is void and inoperative. The Tribunal has therefore rightly held
that non-compliance with the mandatory requirements of the said
provision renders the termination illegal and unsustainable.
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18.The respondent has also opposed the objection raised by the
petitioner regarding the locus of respondent No. 1 Union. It is
submitted that the Tribunal has, upon appreciation of evidence,
rightly held that after refusal of transfer by the concerned
workmen, only 31 employees remained on the rolls of VMPL and
that all such workmen were members of respondent No. 1 Union.
The requirement under Section 9A of the Trade Unions Act, 1926
is stated to have been satisfied. It is further contended that
recognition of a union is not a precondition for maintaining an
industrial dispute under the Industrial Disputes Act, 1947. In the
absence of any recognized union, an unrecognized union
representing the concerned workmen is competent to espouse their
cause.
19.In support of the aforesaid submissions, reliance is placed
upon judicial precedents, including
Dyes and Chemical Workers
Union v. Asian Chemical Works and Ors.
1991 SCC OnLine Bom
299,
Petroleum Employees' Union and Ors. v. Bharat Petroleum
Corporation Ltd. and Anr.
1983 SCC OnLine Bom 123 and
Emerson Climate Technologies (India) Pvt. Ltd. v. Bhartiya Kamgar
Karmachari Mahasangh,
(Writ Petition No. 444 of 2020), wherein
it has been held that an unrecognized union is competent to file a
complaint of unfair labour practice in the absence of a recognized
union. On this basis, it is prayed that the petition be dismissed.
20.In rejoinder, Mr. Cama, learned Senior Advocate for the
petitioner, reiterated that on the date of reference, respondent No.
1 Union was an unrecognized union and therefore lacked locus to
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espouse the dispute. It is further submitted that the Tribunal failed
to consider the provisions of Section 25FF of the Industrial
Disputes Act, which contemplate only two options for employees in
the event of transfer of undertaking, namely, to accept
compensation and discontinue service or to join the transferee.
Reliance is placed upon the judgment of the Supreme Court in
Anakapalle Co-operative Agricultural and Industrial Society Ltd. v.
Workmen,
AIR 1963 SC 1489 to support this proposition. It is also
submitted that the decision to provide or not provide job work is
within the domain of managerial discretion and cannot be
compelled.
21.Learned Senior Counsel further relied upon the judgment in
M/s. Parry and Co. Ltd. v. P.C. Pal and Others, AIR 1970 SC 1334 to
contend that an employer is entitled to arrange its business affairs
in a manner permissible in law, even if such arrangement has the
effect of avoiding certain regulatory consequences. It is submitted
that retrenchment, if effected for valid reasons and not by way of
victimisation or unfair labour practice, cannot be interfered with. It
is further contended that the claim for full back wages has not
been substantiated by adequate evidence, as only one workman
was examined on behalf of all employees. It is also urged that in
the absence of transfer of the factory premises, the relief of
reinstatement could not have been granted. It is lastly submitted
that where the number of employees is less than 100, prior
permission under Section 25-O is not required.
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22.In support of his contention regarding grant of back wages,
reliance is placed upon the judgments of the Supreme Court in
Management of Regional Chief Engineer, Public Health
Engineering Department, Ranchi v. Their Workmen,
(2019) 18
SCC 814,
and Punjab National Bank v. Virender Kumar Goel and
Others,
(2004) 2 SCC 193. It is submitted that once an employee
accepts the benefit of a scheme, he cannot subsequently resile from
the same and claim inconsistent reliefs. On these grounds, it is
urged that the impugned Award deserves to be quashed and set
aside.
REASONS AND ANALYSIS:
23.Having heard the learned Senior Advocate for the petitioner
and the learned Advocate for the respondent Union, and upon
perusal of the record as also the rival pleadings and the material
part of the evidence referred to before this Court, this Court finds
that the controversy turns mainly on one question whether the
concerned 31 workmen stood validly transferred to SPCPL and, if
not, whether the petitioner could still terminate their services
during the pendency of industrial proceedings without prior
approval in law.
24.The petitioner has laid emphasis on the Business Transfer
Agreement and has attempted to build its case around the said
document. It is urged that the transfer was on slump sale basis,
that the business stood transferred, and that all liabilities stood
shifted to SPCPL, and therefore the petitioner cannot now be
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saddled with any liability of reinstatement or back wages. This
submission, at first look, appears to have some strength because
the language of the agreement is indeed wide and speaks of
transfer of business along with assets and liabilities. However,
upon closer scrutiny, this Court finds that such submission cannot
be accepted. It is well settled that in matters arising under
industrial jurisprudence, the Court is not confined to the mere
wording of commercial agreements between parties. The Court
must examine the working arrangement, the manner in which
employment continued or did not continue, and the nature of
control and supervision over the workmen. A document may say
one thing, but if the ground reality shows another, then the Court
cannot shut its eyes to such reality. A transfer between two
corporate entities does not result in termination of employment
unless the requirements are satisfied. Therefore, what is required
to be seen is whether there was a genuine and effective change in
the employer-employee relationship, or whether the arrangement
remained only a paper transaction between two managements
without altering the position of the workmen.
25.When the matter is examined in light of the evidence placed
on record, the stand of the petitioner does not stand supported.
The respondent Union has relied upon the Notice dated 12
January 2011, which indicates that the transfer of employment
was not automatic but was made subject to the individual written
consent of each workman. This condition goes to the root of the
matter. If the scheme of transfer itself contemplates that each
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workman must agree before his employment can be shifted, then
in absence of such consent, the transfer of employment cannot be
presumed. The material on record indicates that the 31 concerned
workmen did not give such consent. In such situation, it would not
be legally permissible for the petitioner to contend that their
employment stood transferred merely because the business was
transferred. The statutory position under Section 25FF also
reinforces this view. The provision does not say that employment
automatically comes to an end or stands transferred upon change
of ownership. On the contrary, as explained by the Supreme Court
in
N.T.C. (South Maharashtra) Ltd. v. Rashtriya Mill Mazdoor
Sangh
, (1993) 1 SCC 217 the effect of transfer depends upon the
terms governing such transfer and upon fulfillment of certain
conditions. Thus, where the terms require consent and such
consent is absent, it would be unsafe to hold that the relationship
of employment stood altered.
26.The petitioner has further attempted to draw strength from
the circumstance that a large number of employees, namely 1117
workmen, accepted the transfer and joined SPCPL by executing
consent letters. This fact cannot conclude the issue in favour of the
petitioner. Industrial law does not operate on the principle of
majority rule in matters of individual rights. Each workman has an
independent status in law. The rights of a minority group do not
stand extinguished merely because a majority has chosen a
different course. The Tribunal was concerned with the dispute
raised by the 31 workmen, and therefore their case had to be
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examined on its own footing. If these workmen did not consent to
the transfer, and if there is material to indicate that they continued
to remain under the control of the petitioner establishment, then
the fact that other employees shifted to SPCPL does not displace
their claim. The Court must be cautious not to dilute statutory
protections by applying number of workmen. The legal question is
not how many accepted the transfer, but whether those who did
not accept it were lawfully transferred. On the material available,
such lawful transfer is not established. Therefore, the contention
based on majority acceptance does not answer the case of the
petitioner.
27.Mr. Cama, learned Senior Advocate for the petitioner, has
raised the objection that respondent No. 1 Union was not a
recognized union on the date of reference and therefore had no
legal standing to raise the dispute. It cannot be accepted that
absence of recognition bars the workmen from approaching a
forum through a union which is otherwise representing them. The
material placed before this Court shows that the concerned 31
workmen were in fact members of respondent No. 1 Union and
that their grievance was taken up by it. If such union is not
permitted to raise the dispute, then practically the workmen would
be left without any remedy. Such a situation cannot be accepted in
industrial law, which is intended to protect workmen and provide
them access to adjudication. The law cannot be read in such
technical manner so as to defeat the remedy itself. Therefore, this
Court is not inclined to hold that the reference was bad only on the
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ground that the union was unrecognized.
28.Coming to the next submission, which is based on Section
25FF of the Industrial Disputes Act, it has been argued that upon
transfer of undertaking, the workmen are left only with two
choices, either to accept compensation and leave service, or to join
the new employer, and that no other option is permissible. For this
purpose, reliance is placed on the judgment in
Anakapalle Co-
operative Agricultural and Industrial Society Ltd.
This Court finds
that such submission proceeds on a narrow reading of the
provision. Section 25FF does not operate in such manner. It does
not say that employment automatically ends, or that workmen
must move to the transferee. The provision only explains what
happens if the transfer results in termination and also when it does
not. The real question is whether in fact the employment
continued or came to an end. In the present case, this issue is in
dispute. There is material to show that the concerned workmen
did not give consent for transfer and continued with the petitioner.
If that be so, it cannot be said that they must be pushed into one of
the two categories suggested by the petitioner. The legal position
requires examination of facts and cannot be applied without such
examination.
29.It has also been argued that the employer has freedom to
decide whether to give job work or not and that such decisions fall
within managerial powers. This Court does not dispute that
management has discretion in running its business. However, such
discretion is not absolute. When such decisions affect the rights of
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workmen, the Court is entitled to examine whether the action is
genuine or whether it is taken to defeat legal protections. If the
decision appears to be a device to remove workmen or to compel
them to accept conditions which they did not agree to, then the
Court cannot remain silent. In the present case, the Tribunal has
come to a conclusion, based on the material available, that the
plea of no work was not correct and that some form of activity was
still continuing. Whether that conclusion is fully correct or not, it
cannot be ignored by saying that it is a matter of management.
Managerial power cannot override statutory safeguards given to
workmen. Therefore, this submission also does not advance the
case of the petitioner in the manner sought.
30.The petitioner has submitted that the Tribunal has relied
only on one witness examined on behalf of the Union. This
submission requires careful examination. The Court must see what
that witness stated and whether his statement finds support from
other material. On reading the record as placed, it appears that the
Tribunal has not proceeded on a single statement. The Tribunal
has also taken into account the admissions given by the petitioner’s
own witness. Those admissions carry weight because they come
from the side of the petitioner itself. It has been admitted that the
concerned workmen continued to work with VMPL till the date of
termination, that their wages were paid by VMPL, and that even
after execution of the BTA they were working in the PEECO Plant.
When a party’s own witness speaks against its stand, the Court is
entitled to rely upon such statement. Therefore, the conclusion
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drawn by the Tribunal cannot be called arbitrary only because the
petitioner takes a different view of the evidence. A finding
becomes perverse only when it is wholly unsupported or contrary
to record.
31.The petitioner has also argued that since the workmen
accepted and encashed the terminal dues, they cannot now
challenge the termination. It is true that acceptance of dues is a
relevant fact and may indicate certain conduct on part of
workmen. However, such acceptance cannot be treated as final
settlement, especially when the workmen are disputing the legality
of termination. Often, workmen accept such amounts due to
financial necessity and without abandoning their rights. Therefore,
mere encashment of cheques cannot validate an action which is
otherwise not in accordance with law. The real issue remains
whether the termination itself was lawful, whether it was done by
a competent authority, and whether statutory provisions such as
Section 33(2) were followed. If the termination is defective,
payment of compensation cannot cure that defect. Thus, this
submission of the petitioner does not take the matter much further.
32.The petitioner has placed considerable reliance upon the
Secondment Agreement and has argued that SPCPL was exercising
control and supervision over the workmen. The respondent Union
has pointed out that even the petitioner’s own witness admitted
that the workmen continued to work under VMPL and were paid
wages from VMPL. In such a situation, the Tribunal was justified in
holding that the employer-employee relationship with VMPL had
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not come to an end. In commercial dealings, secondment
agreements are made for convenience of operations, but such
arrangements do not change the legal employer unless there is
complete transfer of control in accordance with law. The evidence
in the present case does not establish such complete transfer.
Therefore, the petitioner cannot avoid its obligations merely by
referring to the secondment arrangement.
33.The petitioner has attempted to rely upon the transfer
agreement to say that employment stood shifted. However, Section
25FF does not support such proposition. As explained in
N.T.C.
(South Maharashtra) Ltd. v. Rashtriya Mill Mazdoor Sangh
, the
section does not terminate employment upon transfer. It
recognizes that employment may continue, and compensation is
attracted only if there is termination. The proviso further protects
the workmen where continuity of service and conditions are
maintained. In the present case, the basic question is whether the
concerned workmen had agreed to such transfer and whether their
service actually continued under the new employer. The material
on record suggests otherwise. Therefore, the petitioner cannot rely
on Section 25FF.
34.This Court also finds that the submission of the respondent
Union regarding transfer of workmen to the PEECO Plant deserves
consideration. The evidence indicates that the said plant had
suffered damage due to fire, that it was not functional, that there
was no production activity, and that basic working conditions were
lacking. If this position is accepted, then transferring the workmen
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to such a place cannot be viewed as a administrative decision. It
gives an impression that the workmen were being placed in a
position where they could not effectively work. When workmen
refuse to accept transfer to another employer and are then shifted
to a non-functional unit, it raises doubt about the bona fides of
such action. The inference drawn by the Tribunal that such
conduct amounts to victimisation cannot be said to be without
basis.
35.The issue relating to authority of Mr. Subhash D. Chaudhary
also assumes importance. It has been contended that he had
already been removed from the position of Director before issuing
the termination orders. The petitioner has not been able to place
material showing that he continued to have authority thereafter.
The explanation regarding a stay order is not supported by any
document. In absence of such proof, the Tribunal was justified in
doubting his authority. If termination is issued by a person who
does not have authority, such action becomes questionable in law.
Therefore, the finding of the Tribunal on this aspect cannot be said
to be unreasonable.
36.Apart from this, at the relevant time, industrial proceedings
were pending, and interim orders were operating, restraining
change in service conditions. Despite this, the services of the
concerned workmen were terminated. Section 33(2) of the
Industrial Disputes Act places a clear restriction on the employer in
such situations. It requires that during pendency of proceedings,
certain actions cannot be taken without following the prescribed
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procedure. This is a substantive safeguard intended to protect
workmen during adjudication. If such requirement is not complied
with, the action becomes legally unsustainable. The Tribunal has
taken note of this aspect and has rightly held that the termination
suffers from this defect.
37.The petitioner has attempted to argue that since the number
of workmen had reduced, the requirement of seeking approval was
not applicable. This argument cannot be accepted once it is found
that the concerned workmen were still employees of VMPL and
that proceedings were pending. The applicability of statutory
safeguards cannot be avoided by merely referring to the number of
employees. The law requires compliance in substance. Therefore,
this submission does not assist the petitioner.
38.The principle laid down in N.T.C. (South Maharashtra) Ltd.
v. Rashtriya Mill Mazdoor Sangh
further supports the case of the
respondent Union. The law is clear that transfer of undertaking
does not bring an end to employment. The continuity of service
and the surrounding circumstances must be examined. In the
present case, the facts do not show a lawful transfer of
employment of the concerned workmen. Therefore, the petitioner
cannot rely upon the BTA alone to deny its responsibility.
39.The petitioner has argued that since SPCPL is now
undergoing insolvency proceedings, the liability should fall on
SPCPL and not on the petitioner. Insolvency of one entity does not
automatically shift liability if another entity was in fact the
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employer at the relevant time. The Court must identify who had
control over the workmen and who took the decision of
termination. The material before the Tribunal indicates that VMPL
continued to be the employer and that the termination was
effected by it. Therefore, the workmen cannot be deprived of relief
on account of insolvency of SPCPL.
40.The learned counsel for the Respondent has placed reliance
upon the averment made by the respondent Union in its
complaint, as also the statement made in the affidavit in lieu of
examination-in-chief of Mr. Vasant Kumbhar, to contend that the
workmen have asserted that they remained unemployed after
termination. It is pointed out that in paragraph 4 of the Statement
of Claim, it has been stated that the concerned workmen were
unable to secure any alternative employment, and that in the
affidavit, the said witness has deposed on behalf of all the
workmen that they are unemployed. In the present case, Mr.
Vasant Kumbhar has made such a statement not only in pleadings
but also on oath. There is nothing shown on record to indicate that
this statement was demolished in cross-examination or
contradicted by any material brought by the petitioner. Once a
workman asserts unemployment, the burden shifts to the employer
to show that the workman was in fact gainfully employed
elsewhere. Mere denial is not sufficient. In absence of any rebuttal
evidence from the petitioner, the statement made by the workman
cannot be discarded lightly. At the same time, it is also necessary to
observe that such statement of unemployment, though relevant, is
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not the sole factor for grant of full back wages. The Court is
required to consider the entire set of circumstances, including the
nature of termination, the conduct of parties, and the overall
equities. However, the submission of the petitioner that the claim
of unemployment is unsupported or unreliable cannot be accepted
on the material as it stands. The Tribunal was therefore justified in
taking note of the said assertion while considering the relief to be
granted.
41.For these reasons, this Court holds that the impugned Award
does not call for interference. The petitioner has failed to show
that the workmen were transferred so as to sever their relationship
with VMPL, or that the termination dated 11th July 2013 was
made by a competent authority in compliance with the mandatory
requirements of law. The objections based on locus, BTA,
secondment, payment of dues and majority transfer are not
sufficient to displace the findings of the Tribunal. The result,
therefore, is that the petition deserves to be dismissed.
42.In view of the foregoing discussion, and upon overall
assessment of the material submissions, evidence on record, and
the findings arrived at hereinabove, the following order is passed:
(i) The writ petition stands dismissed;
(ii) The impugned Award dated 28th April 2025 passed by
the Industrial Tribunal, Thane in Reference (IT) No. 11 of
2014 is upheld;
(iii) It is held that the termination of the concerned 31
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workmen is illegal and unsustainable in law, and the findings
recorded by the Tribunal in that regard do not warrant
interference under writ jurisdiction;
(iv) The petitioner shall comply with the directions issued
in the impugned Award within a period of four weeks from
the date of this order;
(v) In the facts and circumstances of the case, there shall
be no order as to costs;
(vi) Rule is discharged.
(AMIT BORKAR, J.)
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