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No Coercive Action Against Jute Mills For Failing To Pay Employee Wages During The Covid-19 Lockdown: Supreme Court [Read Order]

18 May 2020 4:33 AM GMT
No Coercive Action Against Jute Mills For Failing To Pay Employee Wages During The Covid-19 Lockdown: Supreme Court [Read Order]
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The Supreme Court of India, today directed that no coercive action be taken against any jute mill for failing to comply with the Ministry of Home Affairs, Government of India's Notification dated 29.03.2020. The directions were passed by a bench comprising of Hon'ble Mr. Justice L. Nageshwar Rao, Hon'ble Mr. Justice S.K. Kaul and Hon'ble Mr. Justice B.R. Gavai today, i.e. on 15.05.2020 whilst issuing Notice on a writ petition filed on behalf of the Indian Jute Mills Association.

The Writ Petition, filed under Article 32 of the Constitution of India, challenges the constitutional validity of clause (iii) of the Government Order No. 40-3/2020-DM-I(A) dated 29.03.2020 issued by the Ministry of Home Affairs, Government of India, read with the G.O. No. CLC(C)/Covid-19/Instructions/LS-1 dated 30.03.2020 and clause (iv) of the Government Order No. 63-CS/2020 dated 29.03.2020 issued by the Chief Secretary, Government of West Bengal. The Petitioners have also challenged the refusal on the part of the Government of West Bengal to allow the operation of the jute mills in the State even though the same are exempted from the ambit of the lockdown as per the Order No. 40-3/2020-DM-I(A) dated 24.03.2020 and subsequent Order Nos. 40-3/2020-DM-I(A) dated 15.04.2020 and 01.05.2020.

The petition outlines that "jute textile" is an essential commodity within the meaning of the Section 2A of the Essential Commodities Act, 1955 (Act No. 10/1955) and used for packaging of food grains, sugar etc. under the Jute Packaging Materials (Compulsory Use in Packing Commodities) Act, 1987 (Act No. 10/1987). Jute bags are, thus, compulsorily purchased at controlled prices by the Ministry of Textiles, Government of India through the Jute Commissioner \ by way of Production Control and Supply Orders (hereinafter referred to as "PCSOs") issued under Clause 4 of the Jute and Jute Textiles Order, 2016. It has been submitted that in view of the above, the Jute mills are duty bound to supply the jute bags on the basis of the PCSOs issued by and at the price so fixed by the Jute Commissioner.

The Petition further states that the Notification/Government Order No. 40-3/2020-DM-I(A) dated 29.03.2020, read with the G.O. No. CLC(C)/Covid-19/Instructions/LS-1 dated 30.03.2020 is arbitrary, illegal, irrational, unreasonable and contrary to the law enshrined under Article 14 and Article 19(1)(g) of the Constitution of India to the extent that the same direct payment to the employees during the period of the lockdown during the Covid-19 pandemic. It is submitted that by way of the impugned notifications, otherwise cash strapped jute mills will be forced into insolvency and loss of control of business. The said Notifications/Government Order tantamount to arbitrary and unreasonable interference with the rights of the members of Petitioner No. 1.

The imposition of such an unreasonable condition of making payments to all employees regardless of the financial condition of the employer imposes a grave financial burden on the employer and can push a private establishment to bankruptcy and closure, thus, being violative of Article 19(1)(g). The Petition argues that, the ramifications of private establishments to abide by such financial burdens do not stand the test of reasonableness under by Article 19(6).

The Petition states that the said Notification/Government Order dated 29.03.2020 has been issued by the Ministry of Home Affairs, Government of India under Section 10(2)(l) of the Disaster Management Act, 2005, and a bare perusal of the said provision makes it abundantly clear that the same does not contemplate imposition of any financial obligations on the private sector for payment of wages, and that any such direction will be in complete contravention of the obligations of the State enshrined under Article 43 of the Constitution of India

The Petitioners have submitted that the provisions of the Industrial Disputes Act, 1947 have for long been the governing provisions with respect to lay-offs and lay-off in consequence of the happening of a natural calamity is specifically provided therein. It has been submitted that the Industrial Disputes Act, 1947 is a special law which mandates payment of lay off compensation in the event of a natural calamity or other connected reasons, and that being the case, the various directions/circulars/communications of the Government of India and the various State Governments can at best be said to be advisory, being in the teeth of a specific mandate of a special law. In view thereof, the Petitioner No. 1's members should be entitled to pay wages, lay off, and retrench workers in accordance with the terms of employment of the workmen.

The Petitioners were represented by Mr. Abhrajit Mitra, Senior Advocate, and assisted by Ms. Nandini Gore, Senior Partner, Ms. Tahira Karanjawala, Principal Associate, Mr. Arjun Sharma, Senior Associate and Mr. Jasvir Singh Sabharwal, Associate from Karanjawala & Co. Advocates, and Ms. Rajshree Kajaria, Advocate.

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