Chairman Of Industrial Establishment Held Liable For Non-Compliance With Labor Court Order: Bombay HC

Bombay High Court: A single judge bench of Justice Y. G. Khobragade upheld the issuance of criminal process against the Chairman of Kinetic Engineering Ltd., for failing to implement a Labor Court judgment. The court rejected the argument that a Chairman cannot be held responsible for compliance with court orders. The court clarified that persons in positions of control and supervision over an industrial establishment's affairs are obligated to implement court judgments even when appeals are pending without a stay order. Background Ramrao Hanumantrao Kandekar was employed as a Machinist at Kinetic Engineering. He was served with a charge sheet on January 30, 1997, for alleged misconduct. After a domestic inquiry, he was dismissed from service on May 8, 1998. Aggrieved by this dismissal, Kandekar filed a complaint before the Labor Court, Ahmednagar. On November 29, 2019, the Labor Court allowed the complaint, declaring that the dismissal amounted to unfair labor practice under Item Schedule IV of the Maharashtra Recognition of Trade Unions and Prevention of Unfair Labor Practices Act, 1971 (“MRTU & PULP Act”). Consequently, the court quashed the dismissal order and provided Kandekar with full back wages and consequential benefits. Kinetic Engineering challenged this order by filing a Writ Petition before the High Court. However, the court declined to grant an interim stay on the Industrial Court's judgment. When Kinetic Engineering failed to implement the Labor Court's judgment, Kandekar issued notices to various officials, including Arun Hastimal Firodia (petitioner), the Chairman. Firodia's notice was returned “unclaimed.” Subsequently, Kandekar filed a criminal complaint under Section 48(1) of the MRTU & PULP Act. On August 6, 2022, the Labor Court issued process against the accused, including Firodia. Aggrieved by this, Firodia filed the present writ petition. Arguments Mr. Rajendrraa Deshmukkh, representing Firodia, argued that Firodia was not a party to the original complaint filed by Kandekar. He further explained that as per Section 2(n) of the Factories Act, 1948, the occupier (the Managing Director) is responsible for the day-to-day affairs of the Industrial Establishment, not the Chairman. He argued that director cannot be held vicariously liable for an employer's offenses unless specific conditions are met. Lastly, he submitted that Firodia is an elderly person suffering from various ailments, and the criminal proceedings were filed just to harass him. Mr. V. P. Golewar, representing Kandekar, argued that compliance was mandatory, as the Labor Court and Industrial Court judgments had not been stayed. He further pointed out that the Chairman is responsible for the day-to-day affairs of the Industrial Establishment and is obligated to comply with the judgments. He argued that Firodia had knowledge of the judgments, and deliberately failed to comply with them. Court's Reasoning Firstly, the court observed that it was not in dispute that the Labor Court had set aside Kandekar's dismissal order. While a writ petition challenging these orders was pending, the High Court had declined to stay their operation. Thus, the court held that the judgment remained enforceable. Secondly, the court noted that Firodia, as Chairman of the Industrial Establishment, was responsible for its day-to-day affairs. The court found that he had not denied knowledge of the judgments or the issuance of notices calling for compliance. Since the envelope containing Firodia's notice returned “unclaimed,” the court held that it was deemed served under Section 27 of the General Clauses Act. Thirdly, the court rueld that since there was no stay on the Labor Court's judgment, Firodia was obligated to comply with it. Thus, the court held that the Labor Court had correctly issued process under Section 48(1) of the MRTU & PULP Act. Thus, the petition was dismissed. The court concluded that Firodia was in control and supervision over affairs and day-to-day transaction of the said establishment, and thus was responsible for obeying the Labor Court's judgment. Case Title: Arun Hastimal Firodia v. The State of Maharashtra and AnotherCitation: 2025 LiveLaw (Bom) 137 Counsel for the Petitioner: Mr. Rajendrraa Deshmukkh, Senior Advocate a/w Ms. Rakshanda Rajan Jaiswal i/by Mr. Vishal Chavan, Advocate Counsel for the Respondents: Mr. S. M. Ganachari, APP for Respondent No. 1 State; Mr. V. P. Golewar, Advocate for Respondent No. 2 Click Here To Read/Download The Order

Chairman Of Industrial Establishment Held Liable For Non-Compliance With Labor Court Order: Bombay HC

Pranav Kumar

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