IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 14TH DAY OF MARCH, 2025 BEFORE THE HON'BLE MR JUSTICE ANANT RAMANATH HEGDE WRIT PETITION NO.35414 OF 2011 (L-TER) C/W WRIT PETITION NO.35415 OF 2011 (L-TER) WRIT PETITION NO.35417 OF 2011 (L-TER) IN WP NO.35414/2011: BETWEEN: THE CHAIRMAN & MANAGING DIRECTOR, MYSORE PAPER MILLS LTD., BHADRAVATHI, SHIMOGA DISTRICT, NOW REP. BY ITS COMPANY SECRETARY. ...PETITIONER (BY SRI PRASHANTH B R, ADV. FOR SRI SUDHAKAR B, ADVOCATE) AND: 1. T G RAMESHACHARI, S/O.GANGADHARAPPA, AGED ABOUT 36 YEARS, KIRTHINAGAR MAIN ROAD, BESIDES CHANNEL, SHIMOGA CITY. 2. DEVARAJA, S/O.VEERABHADRAPPA, AGED ABOUT 30 YEARS, ABASI, PADAVAGODU POST, SAGAR TALUK. ...RESPONDENTS (BY SRI G.S.BALAGANGADHAR, ADV. FOR R1 & R2) THIS WRIT PETITION IS FILED UNDER ARTICLES 226 AND 227 OF THE CONSTITUTION OF INDIA PRAYING TO - 2 - QUASH THE AWARD DATED 25.02.2010, DIRECT THE PETITIONER MANAGEMENT TO REINSTATE THE RESPONDENTS TO THEIR ORIGINAL POST WITH CONTINUITY OF SERVICE ALONG WITH 50% BACKWAGES FROM THE DATE OF THE REMOVAL FROM THE SERVICE TILL THE DATE OF THE REINSTATEMENT IN I.D REF. NO.26/2005 PASSED BY THE LABOUR COURT, MANGALORE AS PER ANNEXURE A. IN WP NO.35415/2011: BETWEEN: THE CHAIRMAN & MANAGING DIRECTOR, MYSORE PAPER MILLS LTD. BHADRAVATHI, SHIMOGA DISTRICT, NOW REPRESENTED BY ITS COMPANY SECRETARY. ...PETITIONER (BY SRI B R PRASHANTH, ADV. FOR SRI SUDHAKAR B, ADVOCATE) AND: 1. G LANKESHAPPA, S/O LATE G MANJAMMA, AGED ABOUT 40 YEARS, THYAJAVALLI VILLAGE, KONAGAVALLI POST, SHIMOGA TALUK AND DISTRICT. 2. UMESHA, S/O UDUMALDAPPA, AGED ABOUT 40 YEARS, CHANNESHWARA VILLAGE, CHANNAGIRI TALUK, DAVANAGIRI DISTRICT. 3. H CHANDRAPPA, S/O ADYAPPARA HANUMANTHAPPA, AGED ABOUT 44 YEARS, - 3 - KERE VILLAGE, YADEHALLI POST, BHADRAVATI TALUK, SHIMOGA DISTRICT. 4. GURUMURTHY, S/O MANJAPPA, AGED ABOUT 42 YEARS, KALEDI ROAD, 1ST CROSS, SUBHASH NAGAR, SAGAR TALUK, SHIMOGA DISTRICT. 5. PURUSHOTHAMA, S/O SHIVARMASHETTY, AGED ABOUT 44 YEARS, AMBARAGODLU VILLAGE, SAGAR TALUK,SHIMOGA DIST. 6. B T SIDDAPPA, S/O THIMMAPPA, AGED ABOUT 44 YEARS, HOGEREHALLI VILLAGE, KADUR TALUK, CHIKMAGALUR DISTRICT. 7. MALATHI, W/O LATE VASUDEVAMURTHY, AGED ABOUT 36 YEARS, SHIRIGARU VILLAGE, SOJABURU POST,THIRTHAHALLI TALUK, SHIMOGA DISTRICT. 8. NAGARAJ, S/O NARAYANAPPA, AGED ABOUT 40 YEARS, JANATHA COLONY, AVINAHALLI VILLAGE, SAGAR TALUK, SHIMOGA DISTRICT. 9. LEELAVATHI, W/O LATE NATARAJ, AGED ABOUT 34 YEARS, - 4 - KUSAGUR VILLAGE, PUTTUR POST, SHIMOGA TALUK & DISTRICT. 10. BASHEER S/O VEERASAB, AGED ABOUT 36 YEARS, HUNCHADAKATTE POST, THIRTHAHALLI TALUK, SHIMOGA DISTRICT. ...RESPONDENTS (BY SRI G S BALAGANGADHAR, ADV. FOR R1 TO R10 ) THIS WRIT PETITION IS FILED UNDER ARTICLES 226 AND 227 OF THE CONSTITUTION OF INDIA QUASH THE AWARD DT 25.02.2010 DIRECTING THE PETITIONER MANAGEMENT TO REINSTATE THE RESPONDENTS TO THEIR ORIGINAL POST WITH CONTINUITY OF SERVICE ALONG WITH 50% BACKWAGES FROM THE DATE OF THE REMOVAL FROM THE SERVICE TILL THE DATE OF THE REINSTATEMENT IN ID REF. NO.24/2005 PASSED BY THE LABOUR COURT, MANGALORE AS PER ANNX-A. IN WP NO.35417/2011: BETWEEN: THE CHAIRMAN & MANAGING DIRECTOR MYSORE PAPER MILLS LTD., BHADRAVATHI, SHIMOGA DIST NOW REP BY ITS COMPANY SECRETARY. ...PETITIONER (BY SRI B R PRASHANTH, ADV. FOR SRI SUDHAKAR B, ADVOCATE) AND: 1 . G H BASAVARAJ, S/O HALLAPPA G H AGED ABOUT 35 YEARS, CHANNAHAKKALU VILLAGE, - 5 - SIRIVANTHE POST, SAGAR TALUK, SHIMOGA DISTRICT. 2 . LAKSHMANAPPA, S/O MANJAPPA, AGED ABOUT 35 YEARS, KANASE VILLAGE, SYDUR POST, SAGAR TALUK, SHIMOGA DISTRICT. 3 . SMT SUVARNAMMA, W/O LATE NARAYANAPPA, AGED ABOUT 35 YEARS, GALIMANE VILLAGE, SAGAR TALUK, SHIMOGA DISTRICT. ...RESPONDENTS (BY SRI BALAGANGADHAR G S, ADV. FOR R1 TO R3) THIS WRIT PETITION IS FILED UNDER ARTICLES 226 AND 227 OF THE CONSTITUTION OF INDIA PRAYING TO QUASH THE AWARD DT.25.02.2010, DIRECTING THE PETITIONER MANAGEMENT TO REINSTATE THE RESPONDENTS TO THEIR ORIGINAL POST WITH CONTINUITY OF SERVICE ALONG WITH 50% BACKWAGES FROM THE DATE OF THE REMOVAL FROM THE SERVICE TILL THE DATE OF THE REINSSTATEMENT IN ID.REF.NO.8/2006 PASSED BY THE LABOUR COURT, MANAGALORE AS PER ANNEXURE-A. THESE WRIT PETITIONS PERTAINS TO PRINCIPAL BENCH BENGALURU HAVING BEEN HEARD AND RESERVED ON 04.02.2025 AND COMING ON FOR PRONOUNCEMENT OF ORDERS AT KALABURAGI BENCH THROUGH VIDEO CONFERENCING, THIS DAY, THE COURT MADE THE FOLLOWING - 6 - CAV ORDER The Writ Petition No.35415/2011 and W.P.No.35417/2011 are clubbed with W.P.No.35414/2011. The petitioner in the aforementioned Writ Petitions is the same Establishment. 2. The respondents in the aforementioned Writ Petitions claimed to be the workmen under the petitioner. The claim made by all workmen in aforementioned three petitions is similar and the evidence led by the present petitioner in I.D.Nos.24/2005 and 08/2005 before the Labour Court is also treated as evidence on behalf of Management in I.D No.26/2005. 3. The aforementioned petitions are arising from the awards dated 25.02.2010 in I.D Nos.24/2005, 08/2005 and 26/2005 on the file of the Labour Court, Mangalore. 4. Since the defence raised by the Establishment in respect of the claim made by the workmen in all the three disputes referred to above, is one and the same, and though the documentary evidence produced by the workmen in aforementioned three disputes before the Labour Court - 7 - slightly different in each case, as the writ petitions were already clubbed together, as per the request made by both the counsel, the petitions were heard together and disposed of by common judgment. 5. The point for reference in W.P No.35417/2011 is extracted as under: “ಆಡತ ವಗದವ ಾದ ೖಸೂರು ೇಪ ೆ ಭಾವ , !ವ"ಗ# $%ೆ& ಇವರು ಅ$)ಾರ ಾದ !ೕ $.*ೆ+.ಬಸವ ಾ-, ಲ/0ಣಪ2 ಮತು4 !ೕಮ ಸುವಣಮ5 ಎಂಬ 8ಾಕರನು; <=ಾಂಕ:20.11.2003 >ಂದ 8ೆಲಸ<ಂದ ?ೆ@ೆದು*ಾAರುವBದು =ಾCಯ ಸಮ5ತEೇ? 2) *ಾFಲ&ದ ಪ/ದ& ಈ 8ಾಕರು Hಾವ >ೕ ಯ ಪ>*ಾರ8ೆI ಅಹರು?” 6. The point for reference in other two industrial disputes are on identical lines with reference to the workmen concerned in the dispute. 7. The Labour Court has answered the reference in part in favour of the workmen and also held that first party workmen are entitled to reinstatement to their original post with continuity of service. The Labour Court awarded 50% of - 8 - the backwages from the date of removal from service till the date of reinstatement. 8. These petitions are filed by the Establishment assailing the awards referred to above. 9. The first party workmen before the Labour Court made a claim that the workmen were working under the petitioner – Establishment since 01.06.1992. It is also pleaded that workmen were working in different posts like watchers, planters and they were paid wages every month. It is claimed by workmen that they were paid a sum of Rs.1,750/- when they were denied employment. 10. The workmen contended that on 20.11.2003, the petitioner - Establishment without any prior notice removed the workmen from the employment despite the workmen working continuously for more than 240 days in a year for more than 10 years. It is also alleged that workmen were denied employment despite assurance of continuous employment. 11. The writ petitioners in the statement of objections filed before the Labour Court took a stand that petitioner - - 9 - Establishment is not the employer of the workmen. It is stated that the State has majority shareholding in the petitioner–Establishment and the recruitment in the petitioner–Establishment is governed by Recruitment Rules. It is contended that the forest officers who were deputed for the purpose of raising plantation engaged workmen to raise the plantation in the property leased to the petitioner – Establishment. Thus, it is pleaded that the workmen engaged by the forest officers to raise plantation cannot be termed as employees of petitioner – Establishment. 12. It is further stated that the daily wagers who have not been recruited without following the Recruitment Rules are not entitled to be absorbed as regular employees and not entitled to claim the benefits payable to regular employees. 13. The Labour Court after considering the materials on record has passed the impugned awards. Hence, the petitioner – Establishment is before this Court assailing the awards referred to above. - 10 - 14. In the Writ Petitions, certain new facts, which are not pleaded in the statement of objections before the Labour Court are pleaded. Those facts can be summarised as under: -33,000 hectares of forest land were leased by the State in favour of the petitioner - Establishment for raising captive plantation to meet Establishment’s raw materials requirements. The petitioner is involved in the manufacture of paper and paper products. The plantation was sought to be raised to meet the raw material requirements of petitioner – Establishment. 15. The petitioners' claim that the plantation was done in two phases, first phase from 1981-1989, and second phase from 1992-1996. It is stated that the first phase cost was funded by the Overseas Development Administration, London and second phase was funded by M/s. Common Wealth Development Corporation. The petitioner claims that two different categories of workers were engaged on daily wages. One category was under muster roll and second category was on cash basis. It is further stated in the writ petitions that in the year 2001, the number of cash payment workers were reduced and later, the project came to an end - 11 - and decision was taken to discontinue the services of daily wagers. 16. It is reiterated that the statement of objections before the Labour Court did not contain these facts referred in paragraph No.12. 17. In the statement of objections, the petitioner claimed that the workers were engaged on daily wage basis by the Forest Department and there is no relationship of employer and employee between the petitioners and the workmen who raised industrial dispute. 18. It is further claimed that the petitioners who raised the industrial dispute were engaged as daily wagers on temporary basis and not against the sanctioned post. 19. The petitioner contends that award passed by the Labour Court is erroneous as the respondents never worked against the sanctioned post and they were the contract labourers and forest officers who engaged their services had no power to recruit such workmen. It is also pleaded in the writ petitions that the work extracted from daily wagers was seasonal and intermittent. - 12 - 20. Learned counsel for the petitioner contends that the Labour Court has not considered the contention relating to the status of the petitioners as daily wage employees and has only considered the relationship of the employer and employee as such the award is erroneous. It is urged that the Labour Court failed to take into consideration, the work entrusted to the first party workmen was only project based work and as soon as the project was over, the petitioner had disengaged the said workmen which is permissible in terms of contract based temporary work assignment. It is also urged that the Labour Court erred in passing the award for reinstatement without any evidence relating to employment. 21. It is also urged that the petitioner is a Government managed Company is bound by the Recruitment Rules and the workmen were not appointed as per Recruitment Rules. It is also urged that the attendance register and wage register are maintained by the officers of the Forest Department as such relationship of employer and employee is not established between the petitioner and respondents – workmen. - 13 - 22. The reliance is placed on the judgment of the Apex Court in the case of State of U.P. Vs. Neeraj Avasti [2006 SCC L&S 190] and in the case of State of MP Vs. Arun Lal Razak [2006 SCC L&S 429] to contend that the daily wagers do not have the right to claim the status of a regular employee. 23. Learned counsel appearing for the respondents - workmen would contend that 33,000 hectares of land as pleaded in the Writ Petitions were leased by the State in favour of the petitioner. The ownership of the land remained with the Forest Department. The petitioner is involved in the manufacture of paper. The raw materials required for the manufacture of paper were to be supplied from the trees grown in the lands which were leased by the State in favour of the petitioner. Referring to these facts pleaded in the writ petitions, it is urged that to ensure proper utilization of the lands leased in favour of the petitioner in which Government had a majority shareholding and investment, the Government assigned the Forest Department official to supervise the activity of plantation. For this reason, the workers employed by the petitioner were also under the - 14 - supervision of the Forest official who is assigned to the petitioner - Establishment. This does not mean that the workmen were supplied by a Forest Department and engaged by the Forest Department. The workmen were engaged by the petitioner and the payment of wages is also by the petitioner–Establishment. Because of the supervisory work entrusted to the Forest Officials, who have been assigned to the petitioner–Establishment, have also maintained the records, one cannot conclude that the workmen were supplied by the Forest officials. 24. It is also urged that the evidence produced by the workmen are not disputed by the petitioner. Thus, it is urged to uphold the award by dismissing the petition. 25. This Court has considered the contentions raised at the bar, perused the award and the records placed before the Labour Court. 26. There is no dispute that the petitioner is a company established under the Companies Act, 1956. It is a body corporate and has separate independent existence and it is a juristic person. Merely because the Government has invested its capital in the company as a major shareholder or - 15 - in any other capacity, the status of the petitioner - Establishment as a juristic person does not change. The petitioner – Establishment will be in control of the lands leased in its favour in the capacity as a lessee. 27. It is not in dispute that the Government leased 33,000 hectares of land in favour of petitioner for raising captive plantation to meet the petitioner’s raw material requirements. The petitioner itself pleaded in the writ petitions that the captive plantation was funded by Overseas Development Administration, London in first phase and M/s Common Wealth Corporation, London in second phase. It is also pleaded in the Writ Petitions that, for the purpose of raising captive plantation, daily wage workers were engaged on day to day basis by the forest officer. No document is produced to show that respondents – workmen were engaged by forest officer. The facts pleaded in the writ petitions would indicate that the loan is sanctioned to the petitioner by the aforementioned two corporations. This would indicate that all the expenses relating to raising the plantation was funded by the Company from the loan advanced by aforementioned two corporations. - 16 - 28. It has also come in the evidence that the Government used to assign its officers to oversee the activities of the plantation. Under these circumstances, the inference can be drawn that the Government assigned its officers to the petitioner – Establishment only to supervise the plantation activity as the Government was also having a stake in the Company. Thus, in case, the payment register is also maintained under the seal and signature of the Government officer, by that itself, one cannot conclude that the workers were engaged by the State. 29. It is relevant to note that no documents are produced to show that the respondents - workmen were supplied by the Forest Department. Even, the evidence of MW.1 led on behalf of the petitioner – Establishment does not disclose anything as to how and when the forest department supplied the workmen to the petitioner. The evidence of MW.1 recorded in three paragraphs is as vague as it could be. Though MW.1 has stated that recruitment has to be in terms of the Rules and Regulations of the company, the said Rules and Regulations are not produced. Though, it is stated that the payment of the workers will be from the - 17 - budget prepared by the Forest Department, no document is produced in this behalf. 30. Admittedly, the petitioner has not produced any records. It is indeed true that the petitioner – Establishment can rely on the documents produced by the workmen to substitute its claim. However, on going through the said documents, it cannot be said that the defence of the petitioner is established from documents produced by the workmen. As already noticed, merely because the designated forest officer has signed the attendance register and the payment register, one cannot conclude that the payment is made by the forest department from the State fund. If that is the case, there should have been evidence to this effect. The forest department officials have not been examined. 31. The learned counsel for the petitioner would rely on the judgment of the Co-ordinate Bench of this Court in W.P No.11904/2008 in Mysore Papers Mills Ltd. Vs. Sri Prasanna, to contend that the issue involved in this case is covered. This Court is of view that the said judgment is rendered in the backdrop of the facts obtained in the said case and it cannot be said that the facts in the said case and - 18 - the facts in the present case are similar to take a similar view. As already noticed, the petitioner has pleaded in the writ petitions that the plantation is funded by aforementioned two corporations which advanced the loan to the petitioner – Establishment. There is no reference to said fact in the earlier judgment rendered by the Co-ordinate Bench involving one employee. Moreover, the said case is decided based on the evidence placed before it. Unless, it is demonstrated that the pleadings and the evidence in both the cases are similar and contentions raised are similar, one cannot conclude that the workmen involved in this petition are similarly placed. 32. It is urged on behalf of the petitioner that when the appointment has not taken place by following the Cadre and Recruitment Rules, there should not be any order for re-instatement by relying on the judgment of the Apex Court in Municipal Council, Sujanpur Vs. Surinder Kumar [AIR ONLINE 2006 SC 317]. It is noticed that in the aforementioned case, the Apex Court has held so in a situation where the appointment has taken place contrary to the applicable Cadre and Recruitment Rules. However, in the - 19 - instant case, as already noticed, the Cadre and Rrecruitment Rules of the petitioner - establishment are not made available. 33. Referring to the judgment of the Apex Court in the M.P State Agro Industries Development Corpn. Ltd. And Another Vs. S C Pandey [2006(2) SCC 716], it is urged that in case of non-compliance of Rules relating to Recruitment even if the employment for more than 240 days, said person cannot claim to be regularized. It is again reiterated that the Recruitment Rules have not been produced and the petitioner cannot urge the contention relating to non-compliance of Recruitment Rules. 34. It is also noticed that the documents relating to attendance register and cash book register would reflect that these documents are maintained in the name of petitioner – Establishment and not in the name of forest department and list of workers whose work has been stopped with effect from 2001 is also signed by the Manager of the petitioner and not by the Forest Department officials. Merely because the officer of the forest department has also signed the document in the name of the petitioner – Establishment, it does not mean - 20 - that the petitioner – Establishment is not the employer and the forest department engaged the services of workmen on contract basis. To hold that the forest department engaged services of the workmen, there has to be the documentary evidence to support such claim. No such evidence is produced. 35. Learned counsel for the respondents have relied on the following judgment of the Apex Court. a) (2010) 3 SCC 637 – Krishna Singh Vs. Executive Engineer Harayana State b) AIR 2014 SCC 2258 – Bhuvanesh Kumar Dwivedi Vs. M/s. Hindalco Industries Ltd. c) (2010) 2 SCC 543 – Ramesh Kumar Vs. State of Haryana. d) (2015) 12 SCC 754 – Gauri Shanker Vs. State of Rajasthan. e) (2015) 4 SCC 458 – Jasmer Singh Vs. State of Haryana and another. f) AIR 2011 SCC 2532 – Devinder Singh Vs. Municipal Council Sanaur. g) (2010) 1 SCC 47 – Director, Fisheries Terminal Department Vs. Bhikubhai Meghajibhai Chavda. - 21 - 36. This Court has considered the ratio laid down in all the cases. Noticing the facts obtained in the present case and considering the reasons assigned by the Labour Court, this Court is of the view that no grounds are made out to interfere with the awards passed by the Labour Court. No doubt, it is true that there is no elaborate discussion on the evidence placed before the Labour Court. Nevertheless, considering the fact that the dispute is pending since 2006, and the dispute is concerning considerable number of workmen, this Court has looked into the pleadings and evidence before the Labour Court and even on consideration of all the materials, this Court does not find any reason to interfere with the award. 37. The learned counsel for the petitioner submitted that on 07.10.2021, the decision is taken to close the petitioner – Establishment. And the copy of the order is produced. Learned counsel for the respondents has not disputed the said document. 38. If the petitioner – Establishment is closed, then the award for reinstatement is not sustainable in view of subsequent development i.e., the closure of the petitioner – - 22 - Establishment. However, the award in respect of backwages awarded by the Labour Court has to be satisfied and if the closure attracts the closure compensation, same has to be paid to the respondents – workmen in accordance with law. 39. It is also noticed that the respondents have received certain amount from the petitioner as contemplated under Section 17B of the Industrial Disputes Act, 1947. Hence the following: ORDER The Writ Petitions are disposed of on the following terms: i) The impugned awards dated 25.02.2010 in I.D Nos.24/2005, 08/2005 and 26/2005 on the file of Labour Court, Mangalore Camp at Shivamogga are modified. ii) The awards relating to reinstatement of respondents - workmen are set aside in view of closure of the petitioner – Establishment. iii) The awards referred to above for payment of 50% backwages with continuity of service are upheld in part and benefits shall be computed till 07.10.2021, the date of closure of - 23 - petitioner – Establishment or till the age of superannuation of respective respondents – workmen whichever is earlier. iv) While calculating 50% backwages payable, the amount awarded and paid under Section 17B has to be taken into account and should be adjusted towards 50% backwages ordered. v) In case, the amount payable towards 50% backwages is less than Section 17B wages already paid to respondents – workmen then the petitioner shall not claim any amount from the respondents - workmen on the premise that the payment paid is excess. vi) In case, 50% backwages to be paid in terms of this order is more than Section 17B wages already paid, the respondents – workmen are entitled to the balance amount after adjusting the payment received under Section 17B of the Industrial Disputes Act, 1947. vii) Since the petitioner – Establishment is ordered to be closed with effect from 07.10.2021, the backwages shall be calculated from 20.11.2003 to 07.10.2021. viii) The amount shall be paid within 45 days from today failing which the amount payable in respect of backwages and other consequential - 24 - benefits shall carry interest at the rate of 8% per annum from the date of respective awards passed by the Labour Court till actual payment. ix) The respondents – workmen are also eligible for the closure compensation if any awarded or payable as per law. x) No order as to costs. Sd/- (ANANT RAMANATH HEGDE) JUDGE THM