2008 (5) TMI 642 - SC - Indian Laws

Whether under the statutory rules, the retrenched employees were entitled to absorption either in Government Department or in any other Public Sector Undertaking?

Summary

Issues Involved:
1. Premature filing of the writ petition and availability of alternative remedy.
2. Absorption of retrenched employees in government departments or public sector undertakings.
3. Payment of compensation to retrenched employees.
4. Jurisdiction of the High Court to entertain the writ petition under Article 226 of the Constitution.
5. Disputed questions of fact regarding the financial condition and operations of the Corporation.

Issue-wise Detailed Analysis:

1. Premature Filing of the Writ Petition and Availability of Alternative Remedy:
The Corporation contended that the writ petition was premature as no retrenchment had been effected, and alternative remedies were available under the Industrial Disputes Act. One judge of the Division Bench upheld this contention, stating that employees could seek closure compensation under Section 25 FFF of the Industrial Disputes Act or approach the prescribed authority under the Payment of Wages Act. However, the other judge held that since the writ petition had been entertained and interim orders were passed, it should not be dismissed on the ground of alternative remedy. The Supreme Court clarified that the availability of alternative remedies does not bar the High Court from granting relief under Article 226, but it is not a legal proposition that once a petition is admitted, it cannot be dismissed on the ground of alternative remedy.

2. Absorption of Retrenched Employees:
The High Court directed the absorption of retrenched employees in various government departments or public sector undertakings. The Supreme Court noted that the Corporation had statutory rules for absorption framed under the proviso to Article 309 of the Constitution. The High Court was expected to consider these rules and decide whether such absorption could be ordered. The Supreme Court emphasized that there can be no estoppel against a statute, and any assurance given by the Corporation's Secretary had no legal efficacy if it contradicted statutory rules. The employees failed to show a legal right for absorption, and the High Court's direction for absorption was set aside.

3. Payment of Compensation:
The High Court directed the Corporation to pay compensation to the retrenched employees "in accordance with law." The Supreme Court found this direction to be vague and unsupported by any specific provision of law. The High Court did not record any finding of a particular law being violated that would entitle the employees to compensation. The Supreme Court held that such a blanket direction, without a legal basis, could not be enforced and was, therefore, set aside.

4. Jurisdiction of the High Court under Article 226:
The Supreme Court held that the High Court should not have entertained the writ petition under Article 226 due to the availability of alternative remedies. The High Court's decision to entertain the petition and grant relief was deemed inappropriate, given the disputed questions of fact and the existence of statutory rules governing the absorption of employees.

5. Disputed Questions of Fact:
The Corporation argued that its financial difficulties and the decision to retrench employees were based on substantial evidence, including the impact of globalization and competition from the private sector. The Supreme Court noted that such disputed questions of fact are better resolved by a Labour Court or Industrial Tribunal, which can consider evidence and statutory provisions. The High Court's decision to grant relief without addressing these factual disputes was found to be improper.

Conclusion:
The Supreme Court allowed the appeal, set aside the High Court's order, and dismissed the writ petition. It clarified that the employees could approach an appropriate Court/Tribunal under Industrial Law to seek relief, and the Corporation and State authorities could defend their actions. The Court emphasized that legal rights and duties must be established in accordance with statutory provisions, and judicial review should not override these principles.