# Hem Nath & Ors v. U.P. State Sugar Corporation Ltd., Lko. & Ors

- **Citation:** (2020) 12 ILRA 621
- **Court:** High Court of Judicature at Allahabad
- **Decided:** 2020-04-16
- **Case number:** Service Single No. 1111 of 2002
- **Bench:** Sudhir Agarwal
- **Source:** https://unisonlegal.in/judgment/allahabad-high-court/hem-nath-ors-v-u-p-state-sugar-corporation-ltd-lko-ors-45476
- **Pages:** 13

## Headnote

A. Service Law - Payment of Salary -
Schedule II of U.P. Sugar Undertakings
(Acquisition)
Act,
1971;
U.P.
Sugar
Undertakings
(Acquisition)
Act,
1971:
Section
2(h),
3,
7(6)(c),
7(6)(d),
8;
Employees Provident Fund Act, 1952; U.P.
Industrial Disputes Act, 1947; Payment of
Wages Act, 1936-The question raised in this
writ petition is, "whether liability of dues of
petitioners employees of erstwhile employer
i.e. before taking over of Hardoi Mill by
UPSSCL w.e.f. 28.10.1984, would be borne
by
UPSSCL
and/or
Respondent-3
or
petitioners must set up their claim from the
erstwhile Owner/Employer." (Para 10)

A conjoint reading of the provisions of Act,
1971, show that with effect from appointed day
i.e.
28.10.1984,
Scheduled
Undertakings,
specified in Schedule II of Act, 1971 stood
transferred and vested in UPSSCL free from any
debt, charge or encumbrance and any such
debt, charge or encumbrance stood attached to
compensation payable to erstwhile owner of
scheduled undertakings. It was for State
Government to deduct from compensation
payable to erstwhile Employer, the provident
fund or any other dues recoverable under
Employees Provident Fund Act, 1952, in respect
of any person employed in connection with
Scheduled
Undertaking
immediately
before
appointed day. In respect of dues under Act,
1952 recoverable from erstwhile Employer, it
was further open to Employees' Provident Fund
Commissioner to stake a claim before Prescribed
Authority appointed under Act, 1971. (Para 17)

The employees who continued in service on
appointed date and stood transferred to
UPSSCL, all their claims of entire period have to
be borne by UPSSCL and authorities under
Labour
Welfare
Legislation,
like,
EPF
Commissioner or Employees State Insurance
Corporation. It is not open to UPSSCL to dispute
the claim of an employee who was in service on
appointed date and retired while working in
UPSSCL, to suggest, that dues of the period
prior to appointed date must be settled by
employee
with
erstwhile
Owner.
Such
adjustment was permitted to be made from the
compensation payable to erstwhile Owner and it
was the responsibility of UPSSCL or authorities
under Act, 1952 or Employees State Insurance
Act, 1948 but if they had not adjusted the
amount from compensation payable to
erstwhile Owner, it is then-fault, and, they
622 INDIAN LAW REPORTS ALLAHABAD SERIES
cannot dismiss claim of employee who is
allowed to retire on and after appointed
date, i.e., while he/she was serving with
UPSSCL. (Para 18)

The intention of legislature is very clear
that employees shall not be allowed to
suffer on account of a situation created
due to compulsory acquisition of Schedule
Industries under Act, 1971 but all the dues
of employees who stood transferred to UPSSCL,
on appointed date, would be borne by UPSSCL
as also the various authorities under various
labour laws, as the case may be, and, it is not
for the employee to go to any litigation against
erstwhile Employer. (Para 20)

The
outstanding
dues
of
petitioners
cannot be denied by respondents only on
the ground that the same relates to prior
to appointed date, under Act, 1971, and
employees must claim such dues from erstwhile
Employer. (Para 22)

Writ Petitions partly allowed. (E-4)

Precedent distinguished:

## Text

_Characters 0–39,907 of 40,957. This is a partial read: ask again with offset=39907 for what follows._

12 All. Hem Nath & Ors. Vs. U.P. State Sugar Corporation Ltd., Lko. & Ors.
621
with a penalty of break in service which is
having an essence of termination.

18. In view of whatever stated above, in
our opinion, learned single Bench committed a
gross error while interpreting the intent of
clause (2) of Regulation 48. Hence, this appeal
deserves acceptance. Accordingly, the same is
allowed. The judgment impugned dated 10th
February, 2020 passed by learned single Bench
is set aside. The petition for writ is allowed. The
order dated 16th March, 2018 passed by the
competent authority/ General Manager, Baroda
Uttar Pradesh Gramin Bank is quashed to the
extent that relates to treating the period of
suspension of the appellant as not a period spent
on duty and further disentitling him from the
payment of any difference of salary except the
subsistence allowance already paid. The period
aforesaid be treated as the period spent by the
appellant on duty.
----------
(2020)12ILR A621
ORIGINAL JURISDICTION
CIVIL SIDE
DATED: LUCKNOW 16.04.2020

BEFORE

THE HON'BLE SUDHIR AGARWAL, J.

Service Single No. 1111 of 2002

Hem Nath & Ors. ...Petitioners
Versus
U.P. State Sugar Corporation Ltd., Lko. &
Ors. ...Respondents

Counsel for the Petitioner:
S.C. Gupta

Counsel for the Respondents:
P.K. Sinha, Brijesh Kumar Shukla, Rajesh
Kumar Verma.

A. Service Law - Payment of Salary -
Schedule II of U.P. Sugar Undertakings
(Acquisition)
Act,
1971;
U.P.
Sugar
Undertakings
(Acquisition)
Act,
1971:
Section
2(h),
3,
7(6)(c),
7(6)(d),
8;
Employees Provident Fund Act, 1952; U.P.
Industrial Disputes Act, 1947; Payment of
Wages Act, 1936-The question raised in this
writ petition is, "whether liability of dues of
petitioners employees of erstwhile employer
i.e. before taking over of Hardoi Mill by
UPSSCL w.e.f. 28.10.1984, would be borne
by
UPSSCL
and/or
Respondent-3
or
petitioners must set up their claim from the
erstwhile Owner/Employer." (Para 10)

A conjoint reading of the provisions of Act,
1971, show that with effect from appointed day
i.e.
28.10.1984,
Scheduled
Undertakings,
specified in Schedule II of Act, 1971 stood
transferred and vested in UPSSCL free from any
debt, charge or encumbrance and any such
debt, charge or encumbrance stood attached to
compensation payable to erstwhile owner of
scheduled undertakings. It was for State
Government to deduct from compensation
payable to erstwhile Employer, the provident
fund or any other dues recoverable under
Employees Provident Fund Act, 1952, in respect
of any person employed in connection with
Scheduled
Undertaking
immediately
before
appointed day. In respect of dues under Act,
1952 recoverable from erstwhile Employer, it
was further open to Employees' Provident Fund
Commissioner to stake a claim before Prescribed
Authority appointed under Act, 1971. (Para 17)

The employees who continued in service on
appointed date and stood transferred to
UPSSCL, all their claims of entire period have to
be borne by UPSSCL and authorities under
Labour
Welfare
Legislation,
like,
EPF
Commissioner or Employees State Insurance
Corporation. It is not open to UPSSCL to dispute
the claim of an employee who was in service on
appointed date and retired while working in
UPSSCL, to suggest, that dues of the period
prior to appointed date must be settled by
employee
with
erstwhile
Owner.
Such
adjustment was permitted to be made from the
compensation payable to erstwhile Owner and it
was the responsibility of UPSSCL or authorities
under Act, 1952 or Employees State Insurance
Act, 1948 but if they had not adjusted the
amount from compensation payable to
erstwhile Owner, it is then-fault, and, they
622 INDIAN LAW REPORTS ALLAHABAD SERIES
cannot dismiss claim of employee who is
allowed to retire on and after appointed
date, i.e., while he/she was serving with
UPSSCL. (Para 18)

The intention of legislature is very clear
that employees shall not be allowed to
suffer on account of a situation created
due to compulsory acquisition of Schedule
Industries under Act, 1971 but all the dues
of employees who stood transferred to UPSSCL,
on appointed date, would be borne by UPSSCL
as also the various authorities under various
labour laws, as the case may be, and, it is not
for the employee to go to any litigation against
erstwhile Employer. (Para 20)

The
outstanding
dues
of
petitioners
cannot be denied by respondents only on
the ground that the same relates to prior
to appointed date, under Act, 1971, and
employees must claim such dues from erstwhile
Employer. (Para 22)

Writ Petitions partly allowed. (E-4)

Precedent distinguished:

1. M/s U.P. State Sugar Corporation Ltd. Vs
Regional Provident Fund Commissioner, 2011
(131) FLR 521 (Para 19)

2. Rashtriya Mill Mazdoor Sangh Vs National
Textile Corporation Ltd. & ors., (1996) 1 SCC
313 (Para 21)

3. U.P. State Sugar Corporation Limited Vs Ram
Prasad & ors., Writ Petition No. 2018 (SS) 1993,
decided on 25.05.2016 (Para 23)

Present
petition
assails
letter
dated
07.02.2001, issued by In-charge, General
Manager, U.P. State Sugar Corporation
Limited.

(Delivered by Hon'ble Sudhir Agarwal, J.)

1. This writ petition under Articel 226
of Constitution of India has been filed by
14 petitioners, namely, Hem Nath, Ram
Shanker Gupta, Ram Narain, Smt. Meera
Devi, Ram Babu, Subedar, Raja Ram,
Suresh Chandra Pandey, Natthu Singh,
Ram Roop Singh, Jai Kumar Singh, Smt.
Savitri Devi, Jagroop Lal and Mool Chand,
with a prayer to issue a writ of certiorari
and
quash
letter
dated
07.02.2001
(Annexure-7 to the writ petition) issued by
In-charge, General Manager, U.P. State
Sugar Corporation Limited (hereinafter
referred to as the "UPSSCL") stating that it
is making all efforts to clear the dues
payable to employees under Voluntary
Retirement Scheme (hereinafter referred to
as "VRS") and payment shall be made in
due course of time except the dues which
are not payable by UPSSCL. Petitioners
have also sought a writ of mandamus
commanding respondents to make entire
payment along with interest at the rate of
18 per cent per annum.

2. Facts, in brief, giving rise to present
writ petition are that petitioners were appointed
and absorbed as Seasonal Permanent Employee
in UPSSCL, Unit Hardoi. As per the terms and
conditions of service, petitioners were entitled
to get salary in the full pay scale during running
period of sugar factory while during the period
of shut down they were entitled for half salary.
On
01.10.2000
respondent-1
introduced
scheme of VRS and circulated cyclostyle form
to the employees to exercise their option. All the
petitioners submitted applications opting VRS.
However, respondents did not pay salary for
crushing season 1981-82 and Retaining Period
Allowance from February 1999 to 20.11.2000
as also the Provident Fund amount accrued to
petitioners. Details of dues of petitioners are
given in para-5 of writ petition as under:

"Petitioner No.1, Hem Nath

(i). The salary for the month of April,
May and June of crussing season 1981-82
@ Rs. 592/- P.M. including Bonus of One
12 All. Hem Nath & Ors. Vs. U.P. State Sugar Corporation Ltd., Lko. & Ors.
623
Year plus interest @18% have not been
paid, which comes out to about...Rs.
30,000/-.

(ii) The retaining period allowance
from Feb.1999 to 20.11.2000 has not been
paid by the opposite party No.1 & 2, which
come out as per calculation as 4776.50 x
22= Rs. 1,05,083 and it comes to 50%
1,05,083/2 Approx.= Rs. 52,541.00

(iii) Provident Fund from the year
1972 to 20.11.2000 has not been paid
which
comes
out
according
to
the
calculation Rs.1,85,000/- against which
Rs.60,000/- was taken as a loan and,
therefore, the petitioner is entitled to get
remaining balance amount of Provident
Fund with interest 18% including compd.
Interest.

Petitioner No.2, Ramshanker Gupta
Appointed- 23.03.1976, VRS-08.12.2000

(i) Retaining allowance February
1999 to 08.12.2000 @ Rs.4512.50 p.m.

4513.50X 23 = Rs.1,03,810/- and its
30% which comes to approx. Rs.31,143.15
and
interest
thereon
@
18%
p.a.
Compound interest.

(ii) Salary for Crushing Season 198182

@ Rs.600/- p.m. Rs.1,800.00/-

Bonus 1981-82 Rs.600.00/-

---------------

Rs.2,400.00/-

18% interest on Rs.2400/-

uptill
date,
comes
to
approx.
Rs.25,000.00/-

including
compound
interest
Rs.27,400/- Approximate

(iii)
Provident
Fund
amount
Rs.1,40,000/-

vide Account No.UP/176/580-B

Fund Commissioner, Lucknow.

Petitioner No.6, Subedar,

Appointed on 11.01.1979, V.R.S. On
07.11.2000

(i) Retaining allowance/salary 22
months

@ 4428.50 p.m.

4428.50 X 22 = 97427/-

and its 30% comes to Rs.32,475/-
approx. Rs.32,475/-

Plus Interest and Compound Interest
@ 18% p.a.

(ii) 3 months salary for Crushing
Season 1981-82

@ 600/- p.m. Rs.1800.00

Bonus for 1981-82 Rs.600.00 3

--------------

Rs.2400.00

Plus interest and compound interest @
18% p.a. Rs.25,000.00 (approx.)

(iii) Arrears of provident fund of
Rs.1,40,000/-

Petitioner No.7, Raja Ram

Appointed on 19.02.1971, V.R.S. On
20.11.2000

(i) Retaining allowance/salary of 22
months

@ 4443.50 p.m.

4443.50 X 22 = Rs.97,757/-

& its 30% comes to Rs.32,552.00
Approx. Rs.32,552.00

Plus interest and compound interest @
18% p.a.

(ii) 3 months salary for Crushing Season

1981-82 @ 600/- p.m. Rs.1800.00

Bonus for 1981-82 Rs.600.00

Interest & Compound interest @ 18%
p.a. Rs.25000.00

on Rs.2400/-

(iii) Arrears of provident fund of
Rs.1,50,000/-

Petitioner No.8, Suresh Chandra
Pandey
624 INDIAN LAW REPORTS ALLAHABAD SERIES

Appointed on 04.12.1968, V.R.S. On
02.12.2000

(i) Retaining allowance/salary of 22
months @4916.50

4916.50 X 22 = Rs.1,08,163/-

& its 50% 1,08,163/2 = Rs.54081/-
Approx.

Plus interest and compound interest @
18% p.a.

(ii) 3 months salary for Crushing
Season 1981-82

@600/- p.m. Rs.1800/-

Bonus for one year 1981-82 Rs.600/-

------------

Rs.2400/-

Plus interest and compound interest @
18% approx. Rs.25000/-

(iii)
Arrears
of
Provident
Fund
Rs.1,90,000/-

Petitioner No.9, Natthu Singh

Appointed on 11.11.1970, V.R.S. On
12.12.2000

(i) Retaining allowance/ salary for 22
months @ 4881.50 p.m.

4881.50 X 22 = Rs.1,07,393/-

and its 50% comes to Rs.53,696.50/-
Rs.53,696.50/-

Plus interest and compound interest
@18% p.a.

(ii) 3 months salary for Crushing
Season 1981-82

@600/- p.m. Rs.1800.00/-

Bonus
for
one
year
1981-82
Rs.600.00/-

Plus interest and compound interest
@18% p.a. Rs.2400.00/-

(iii) Arrears of Provident Fund of
Rs.2,00,000/- Approximately

Petitioner No.10, Ram Roop Singh

Appointed on 02.04.1987, V.R.S. On
10.12.2000

(i) Retaining allowance/ salary for 22
months @ 4631.50 p.m.

@ 4631.50 X 22 = Rs.1,01,893/-

and its 50% comes to Rs.50,946.50
Rs.50,946.50

Plus interest and Compound interest
@ 18% p.a.

(ii) 3 months salary for Crushing
Season 1981-82

@ 600/- p.m. Rs.1800.00

Bonus for one year 1981-82 Rs.600.00

Plus interest and compound interest @
18% p.a.

(iii) Arrears of Provident Fund of
Rs.90,000/-

Petitioner No.11, Jai Kumar Singh

Appointed on 22.06.1987, V.R.S. On
15.12.2000

(i) Retaining allowance/ salary for 22
months @ 4631.50 p.m.

@ 4631.50 X 22 = Rs.1,01,893/-

and its 50% comes to Rs.50,946.50
Rs.50,946.50

Plus interest and Compound interest
@ 18% p.a.

(ii) 3 months salary for Crushing
Season

1981-82 i.e. April, May and June @
600/- p.m. Rs.1800.00

Bonus for one year 1981-82 Rs.600.00

Plus interest and compound interest on
Rs.2400 @ 18% p.a.

(iii) Arrears of Provident Fund of
Rs.95,000/-

Petitioner No.12, Savitri Devi

Appointed on 01.12.1998, V.R.S. On
15.12.2000

(Appointed on 1.12.1997 in place of
her husband under the Dying-in-harness)

(i) Retaining allowance/ salary for 22
months @ 4203.50 p.m.
12 All. Hem Nath & Ors. Vs. U.P. State Sugar Corporation Ltd., Lko. & Ors.
625

@ 4203.50 X 22 = Rs.92,477/-

and its 30% comes to Rs.30,825/-
approximately Rs.30,825

Plus interest and Compound interest
@ 18% p.a.

(ii) 3 months salary for Crushing
Season 1981-82

@ 600/- p.m. Rs.1800.00

Bonus for one year 1981-82 Rs.600.00

Plus interest and compound interest @
18% p.a.

(iii) Arrears of Provident Fund of
Rs.40,000/-

Petitioner No.13, Jagroop Lal

Appointed on 08.12.1975, V.R.S. On
08.12.2000

(i) Retaining allowance/ salary for 22
months @ 4513.50 p.m.

4513.50 X 22 = Rs.99,297.00/-

and its 30% comes to Rs.33,099/-
(approx.) Rs.33099.00

Plus interest and Compound interest
@ 18% p.a.

(ii) 3 months salary for Crushing
Season 1981-82

@ 600/- p.m. Rs.1800.00

Bonus
for
1981-82
(one
year)
Rs.600.00

Plus interest and compound interest on
Rs.2400/- @ 18% p.a.

(iii) Arrears of Provident Fund of
Rs.1,45,000/-

Petitioner No.14, Mool Chand

Appointed on 27.01.1978, V.R.S. On
02.12.2000

(i) Retaining allowance Rs.23,000/-,
1981-82 salary 3 months Rs.1800+600=

400/-, Provident Fund Rs.1,10,000/-"

3. Respondents issued computation
letters as per office memorandum dated

23.09.2000
circulating
VRS
and
terminating petitioners w.e.f. 08.12.2000.
Total amount due to petitioners was shown
as under:

1. Petitioner-1, Hem Nath - Rs.
1,42,264.70

2. Petitioner-2, Ram Shanker Gupta -
Rs. 1,17,737.78

3. Petitioner-3, Ram Narain - Rs.
1,52,226.60

4. Petitioner-4, Smt. Meera Devi - Rs.
3,5054.58

5. Petitioner-5, Ram Babu - Rs.
1,23,065.74

6.
Petitioner-6,
Subedar
-
Rs.
1,04,793.13

7. Petitioner-7, Raja Ram - Rs.
1,34,649.51

8. Petitioner-8, Suresh Chhandra
Pandey -Rs. 62,601.56

9. Petitioner-9, Nathu Singh - Rs.
1,49,903.58

10.Petitioner-10, Ram Roop Singh -
Rs. 66,805.35

11.Petitioner-11, Jai Kumar Singh -
Rs. 66,827.35

12.Petitioner-12, Smt. Savitri Devi -
Rs. 11,337.94

13.Petitioner-13, Jagroop Lal - Rs.
1,17,120.20

14.Petitioner-14, Mool Chand - Rs.
1,18,326.45

4. With respect to provident fund it was
mentioned in aforesaid letters that balance
amount under the head of provident fund shall be
made available separately. However, entire dues
have not been paid to petitioners despite demand
and representations. Subsequently impugned
letter dated 07.12.2001 has been issued stating
that no retaining allowance was payable since
Mill was closed in February 1999.

5. In the counter affidavit filed by
respondent it is said that vide Government
626 INDIAN LAW REPORTS ALLAHABAD SERIES
Order dated 12.11.1999 of UPSSCL, Unit
in question was closed for crushing season
1999-2000 on account of the fact that Unit
had become sick. This order applied to six
units including Hardoi Unit. VRS Forms
submitted by petitioners were accepted and
they were paid dues in accordance with
scheme. Hardoi Unit was acquired by
UPSSCL w.e.f. 28.10.1984 under U.P.
Sugar Undertakings (Acquisition) Act,
1971 (hereinafter referred to as the "Act
1971"), hence dues payable from the date
of acquisition only are the liability of
respondents UPSSCL and not for earlier
period. Petitioners' erstwhile employer was
M/s. Laxmi Sugar and Oil Mills, Hardoi
and petitioners have remedy to claim the
same
from
erstwhile
employer/owner.
Petitioners are not entitled for any retaining
allowance w.e.f. February 1999 as Unit was
already closed.

6. By means of an Application No.
9713 of 2012 it was brought on record that
by means of Slump Sale Agreement dated
22.01.2011, Hardoi Unit has been sold to
M/s. Agile Sugar Pvt. Limited.

7. During pendency of writ petition an
order was passed on 12.10.2012 directing
Regional Provident Fund Commissioner
(hereinafter referred to as "RPFC") to
release entire amount of Provident Fund to
petitioners
within
one
month.
In
furtherance thereof respondent-3 has filed a
short reply and in para-2 thereof it has said
as under:

"2. That from perusal of the entire
pleading and main prayer of the writ
petition in which no claim has been made
out against the opp. party no. 3. However,
so far as the Provident fund dues are
concerned in regard to the petitioners as
mentioned in para 5 of the writ petition, the
status are being given herein under on the
basis of record:

(i) That the petitioner no. 1 Sri Hem
Nath bearing P.F. A/c No. UP/176/685 has
been made out earlier on 20.06.2001
amounting to Rs. 48,182/- and Rs. 76314/-
on 12.01.2007.

(ii) That the P.F. A/c No. UP/176/580B of petitioner no. 2 i.e. Sri Ram Sanker
Gupta is not correct as mentioned in the
writ petition.

(iii) That so far as the petitioner no. 3
Sri Ram Narayan bearing P.F. A/c No.
UP/176/532 A is concerned, the Claim
Form-19 is not yet received in the office of
the opp. party no. 3 for which vide office
letter No. 45786 dated 11.10.2007, the
petitioner was called for but the same
remained in vain.

(iv) That the P.F. A/c No. UP/176/825
of petitioner no. 4, i.e. Smt. Meera Devi is
not orrect as per office record.

(v) That the petitioner no. 5, Sri Ram
Babu bearing P.F. A/c No. UP/176/728 has
been made out earlier on 24.01.2003
amounting to Rs. 72620/-.

(vi) That the petitioner no. 6 Sri
Subedar bearing P.F. A/c No. UP/176/803
has been made out earlier on 08.02.2003
amounting to Rs. 71494/-.

(vii) That the petitioner no. 7 Sri
Suresh Chandra Pandey bearing P.F. A/c
No. UP/176/1432 has been made out
earlier on 13.02.2003 amounting to Rs.
1,31,679/- and on 23.12.2005 amounting to
Rs. 10,087/-.

(viii) That the petitioner no. 8 Sri
Natthu Singh
bearing P.F. A/c
No.
UP/176/1092 has been made out earlier on
24.09.2003 amounting to Rs. 1,25,544/-.

(ix) That the petitioner no. 9 Sri Roop
Singh bearing P.F. A/c No. UP/176/1188
has been made out earlier on 12.01.2003
amounting to Rs. 89,947/-.
12 All. Hem Nath & Ors. Vs. U.P. State Sugar Corporation Ltd., Lko. & Ors.
627

(x) That the petitioner no. 10 Sri Jai
Karan
Singh
bearing
P.F.
A/c
No.
UP/176/81 is not correct as per office
record.

(xi) That the petitioner no. 11 Sri
Savitri Devi w/o late Daya Shanker bearing
P.F. A/c No. UP/176/211 has been made out
earlier on 23.04.1999 amounting to Rs.
1,12,063/-, wherein 60% Rs. 25,990/- is
included.

(xii) That the petitioner no. 12 Sri
Raja
Ram
bearing
P.F.
A/c
No.
UP/176/1474 has been made on 14.02.2003
amounting to Rs. 70,781/-.

(xiii) That the petitioner no. 13 Sri
Jagroop bearing P.F. A/c No. UP/176/763
has been made on 24.01.2003 amounting to
Rs. 1,30,154/-.

(xiv) That the petitioner no. 14 Sri
Mool Chandra bearing P.F. A/c No.
UP/176/806 has been on 15.06.2001
amounting
to
Rs.
30,894/-
and
on
26.09.2005 amounting to Rs. 62,041/-.

As such the P.F. Dues have been made
to the petitioners from the office of the
opposite party no. 3 as per statutory E.P.F.
deposits made by the employer i.e. opposite
parties no. 1 and 2 and returns i.e. F-3A/F6A submitted by the opposite party no. 1
and 2."

8. Thus as per Respondent-3, except
Petitioners-2 and 10, all other petitioners
have been paid due amount of Provident
Fund.

9. I have heard Sri S.C. Gupta,
Advocate for petitioners, Sri P.K. Sinha,
Advocate for Respondents-1 and 2 and Sri
R.K. Verma, Advocate for Respondent-3.
Learned counsel for respondents contended
that whatever amount due to petitioners has
already been paid while petitioners claim is
that the dues of the period up to appointed
date under Act, 1971 have not been paid.
The second dispute relates to payment of
retaining allowance.

10. Thus the question raised in this
writ petition is, "whether liability of dues of
petitioners
employees
of
erstwhile
employer i.e. before taking over of Hardoi
Mill by UPSSCL w.e.f. 28.10.1984, would
be borne by UPSSCL and/or Respondent-3
or petitioners must set up their claim from
the erstwhile Owner/Employer.

11. Admittedly, Respondent-1, Uttar
Pradesh State Sugar Corporation Limited
i.e., UPSSCL is a Government Company
incorporated
under
Section
617
of
Companies Act, 1956.

12. Act, 1971 was enacted for
acquisition and transfer of certain sugar
undertakings and for matters connected
therewith or incidental thereto. M/s Laxmi
Sugar
and
Oil
Mills,
Hardoi,
an
undertaking specified in Schedule II of Act,
1971 stood transferred and vested in
UPSSCL with effect from 28.10.1984.

13. The expression ''appointed day' in
relation to the undertakings specified in
Schedule II of the Act means 28.10.1984.
In Section 2(h) of Act, 1971 the expression
''scheduled undertaking' has been defined to
mean an undertaking engaged in the
manufacture or production of sugar by
means of vacuum pans and with the aid of
mechanical power in a factory specified in
the Schedule to Act, 1971. The assets
included in the expression ''scheduled
undertaking' were specified in said subsection.

14. Section 3 of Act, 1971 deals with
vesting of "Scheduled Undertakings" in
UPSSCL under the provisions of Act, 1971.
Section 3 being relevant is extracted below:
628 INDIAN LAW REPORTS ALLAHABAD SERIES

"3. On the appointed day, every
schedule undertaking shall, by virtue of this
Act, stand and be deemed to have stood
transferred to and vest and be deemed to
have vested in the Corporation free from
any debt, mortgage, charge and other
encumbrance or lien trust or similar
obligation (excepting any lien or other
obligation in respect of any advance on the
security of any sugar stock or other stockin-trade) attaching to the undertaking :

Provided
that
any
such
debt,
mortgage, charge or other encumbrance or
lien, trust or similar obligation shall attach
to the compensation referred to in Section
7, in accordance with the provisions of that
section, in substitution for the undertaking :

Provided further that a debt, mortgage,
charge or other encumbrance or lien, trust or
similar obligation created after the scheduled
undertaking or any property or asset comprised
therein had been attached or a receiver
appointed over it, in any proceedings for
realization of any tax or cess or other dues
recoverable as arrears of revenue shall be void
as against all claims for dues recoverable as
arrears of revenue." (emphasis added)

15. Section 7 of Act, 1971 deals with
determination and mode of payment of
compensation by State Government. Subsection (6) of Section 7 of Act, 1971
enumerates the amounts to be deducted
from
the
compensation
payable
to
Erstwhile
Owners
of
Scheduled
Undertakings. Section 7(6)(c) and 7(6)(d)
being relevant are reproduced below:

"7(6) The State Government shall
provisionally deduct from the compensation
referred to in sub-sections (1), (2), (3), (4)
and (5) the following amounts namely:-

.....

(c) Any amount of wages, retaining
allowances, bonus, provident fund or other
payments due to persons employed as
workmen (within the meaning of the U.P.
Industrial
Disputes
Act,
1947)
in
connection with the scheduled undertaking
immediately before the appointed day.

(d) Any amount due in respect of either
the
employer's
contribution
or
the
employee's contribution realised by the
employer or any other dues recoverable
from the employer under the Employees
Provident Fund Act, 1952 or the Employees
State Insurance Act, 1948 in respect of
persons employed in connection with the
scheduled undertaking immediately before
the appointed day that the employer may
have failed to pay in accordance with the
respective Acts."

(emphasis added)

16. Section 8 of Act, 1971 deals with
the
claims
to
be
satisfied
out
of
compensation
payable
by
State
Government to Erstwhile Owners of
Scheduled Undertakings. Sub-sections (4)
and (5) of Section 8 being relevant are
being extracted below:

"8(4) - The Employees' Provident
Fund Commissioner or the Employees'
State Insurance Corporation may send to
the prescribed authority a certificate in
respect
of
either
the
employer's
contribution or the employee's contribution
realized by the employer or any other dues
recoverable from the employer under the
Employees' Provident Fund Act, 1952, or
the Employees' State Insurance Act, 1948,
as the case may be, in respect of any person
who was employed in connection with the
scheduled undertaking immediately before
the appointed day, that the employer may
have failed to pay in accordance with the
respective Acts.

8(5) - Any person who was employed
exclusively
in
connection
with
the
12 All. Hem Nath & Ors. Vs. U.P. State Sugar Corporation Ltd., Lko. & Ors.
629
scheduled undertaking immediately before
the appointed day, whether he does or does
not
become
an
employee
of
the
Corporation under section 16, or ceases to
be in such employment, or any trade union
of which such person was member, may
prefer to the prescribed authority any claim
relating to any salary, wages relating
allowance, leave salary, bonus pension,
provident fund, gratuity or other payment
due to him, or the proportionate amount
thereof, in respect of any service rendered
by him in connection with the undertaking
before the said day."

17. A conjoint reading of the
provisions of Act, 1971 extracted above,
show that with effect from appointed day
i.e. 28.10.1984, Scheduled Undertakings,
specified in Schedule II of Act, 1971 stood
transferred and vested in UPSSCL free
from any debt, charge or encumbrance and
any such debt, charge or encumbrance
stood attached to compensation payable to
erstwhile owner of scheduled undertakings.
It was for State Government to deduct from
compensation
payable
to
erstwhile
Employer, the provident fund or any other
dues
recoverable
under
Employees
Provident Fund Act, 1952 (hereinafter
referred to as "Act, 1952"), in respect of
any person employed in connection with
Scheduled Undertaking immediately before
appointed day. In respect of dues under Act,
1952 recoverable from erstwhile Employer,
it was further open to Employees' Provident
Fund Commissioner (hereinafter referred to
as "EPC Commissioner") to stake a claim
before Prescribed Authority appointed
under Act, 1971.

18. The aforesaid provisions also
shows that liability as on appointed date in
respect of items mentioned for amounts
referable to Sections 7 and 8 are to be
adjusted or borne or settled between
erstwhile Owner, UPSSCL and statutory
authorities like EPF Commissioner or
Director General or Regional Director
General,
Employees
State
Insurance
Corporation etc. but so far as the
employees who continued in service on
appointed date and stood transferred to
UPSSCL, all their claims of entire period
have to be borne by UPSSCL and
authorities
under
Labour
Welfare
Legislation, like, EPF Commissioner or
Employees State Insurance Corporation. It
is not open to UPSSCL to dispute the claim
of an employee who was in service on
appointed date and retired while working in
UPSSCL, to suggest, that dues of the
period prior to appointed date must be
settled by employee with erstwhile Owner.
Such adjustment was permitted to be made
from the compensation payable to erstwhile
Owner and it was the responsibility of
UPSSCL or authorities under Act, 1952 or
Employees State Insurance Act, 1948
(hereinafter referred to as "Act, 1948") but
if they had not adjusted the amount from
compensation payable to erstwhile Owner,
it is their fault, and, they cannot dismiss
claim of employee who is allowed to retire
on and after appointed date, i.e., while
he/she was serving with UPSSCL.

19. Learned counsel appearing for
Respondent-1, UPSSCL relied on the
authority of this Court in M/s U.P. State
Sugar
Corporation
Ltd.
v.
Regional
Provident Fund Commissioner, 2011(131)
FLR 521. Having gone through the
aforesaid judgment I find that therein this
Court with reference to Act, 1952 has not
held that provident fund of workers of
Ratna Sugar Mills Co., Ltd., Shahganj,
Jaunpur, an undertaking specified in
Schedule III of Act, 1971, of the period
prior to the date of its vesting in
630 INDIAN LAW REPORTS ALLAHABAD SERIES
Corporation, cannot be recovered from
UPSSCL. The relevant extract of judgment
relied on is reproduced below: -

"In my opinion, the argument of
learned counsel for the respondent E.P.F.
Authorities is not tenable. Firstly, the word
'transfer' used in Section 17(B) of the E.P.F.
Act
cannot
apply
to
compulsory
acquisition. Secondly, rights of the EPF
authorities are better protected by the U.P.
Acquisition Act of 1971. E.P.F. Authorities
could very well make a claim under Section
8(4) of the U.P. Acquisition Act of 1971.

Accordingly, it is held that after
acquisition EPF authorities cannot proceed
against the petitioner for realization of
E.P.F. dues if any."

(emphasis added)

20. In the aforesaid judgment I do not
find that the issue, whether dues payable to
an employee, who is allowed voluntary
retirement while serving under UPSSCL,
whether in respect of period prior to
appointed date, will have to be claimed by
such employee from erstwhile Owner or
from employer with whom his services
stood dispensed with, was not an issue.
Therefore, it is not an authority on the point
which has been raised before this Court.
Therein it appears that the authorities under
Act, 1952 did not stake any claim against
compensation payable to erstwhile Owner
as permitted in Section 8(4) and (5) of Act,
1971 since they could have made their
claim under Section 8(4) of Act, 1971 but
having not done so, they could not have
recovered the amount from UPSSCL. There
is no law laid down in aforesaid judgment
that an employee whose services stand
terminated under Voluntary Retirement
Scheme or otherwise by UPSSCL will have
to make a claim against erstwhile Owner in
respect of any amount whatsoever, whether
in respect of period before appointed date
or any other amount. The employees who
stood transferred to UPSSCL under Act,
1971, after such transfer, will settle their
claim irrespective of any period, from
UPSSCL or the authorities under Act, 1952
and they cannot be made to run from one
authority to another or to raise any claim
from erstwhile Owner. The intention of
legislature is very clear that employees
shall not be allowed to suffer on account of
a situation created due to compulsory
acquisition of Schedule Industries under
Act, 1971 but all the dues of employees
who stood transferred to UPSSCL, on
appointed date, would be borne by
UPSSCL as also the various authorities
under various labour laws, as the case may
be, and, it is not for the employee to go to
any litigation against erstwhile Employer.

21. Another authority relied on behalf of
Respondent-1 is Rashtriya Mill Mazdoor
Sangh v. National Textile Corporation Ltd.
and others, (1996) 1 SCC 313. Therein dispute
relates to a Mill transferred to National Textile
Corporation under the provisions of Textile
Undertakings (Take Over of Management) Act,
1983 (hereinafter referred to as "Act, 1983").
On the date of taking over of management, the
employee was not in service and dispute was
regarding gratuity amount of such an employee.
Supreme Court, while dealing with Section 3 of
Act, 1983 (provisions of which are pari materia
with those of the Act, 1971), has held that
liability to pay gratuity which became payable
to a former employee of Mill, by the Mill prior
to its vesting in National Textile Corporation,
was that of Transferor Mill and not of National
Textile Corporation. Relevant extract of
paragraph 11 of said judgment is being quoted
below:-

"The provisions of the Ordinance No.
6 of 1995 also show that the liabilities for
12 All. Hem Nath & Ors. Vs. U.P. State Sugar Corporation Ltd., Lko. & Ors.
631
the period prior to the take over of the
management are to be discharged from the
amount payable to the owner of the textile
undertaking for the acquisition of the
undertaking and not by the NTC. It is,
therefore, not possible to uphold the
contention urged on behalf of the appellant
that NTC is liable in respect of the gratuity
amount payable under the Payment of
Gratuity
Act
to
Respondent
No.2."
(emphasis added)

22. In the above case, the employees
were prior employees, i.e., one who retired/
Terminated before taking over by National
Textile
Corporation.
The
aforesaid
judgment, therefore, also does not help
respondents. In my view the outstanding
dues of petitioners cannot be denied by
respondents only on the ground that the
same relates to prior prior to appointed
date, under Act, 1971, and employees must
claim such dues from erstwhile Employer.

23. There is one more authority of this
Court which has been relied on behalf of
Respondents. Relying upon the decision of
Supreme
Court
in
Rashtriya
Mill
Mazdoor Sangh (supra), this Court, in
Writ Petition No.2018 (SS) 1993, UP
State Sugar Corporation Limited v. Ram
Prasad and others, decided on 25.05.2016
and other connected petitions, has held that
liability for payment of gratuity to
workmen of Nawabganj Sugar Mill Co.
Ltd., Gonda, an undertaking specified in
Schedule III of Act, 1971, who had retired
prior to date of its vesting in Corporation,
was not that of Corporation. The relevant
portion of judgment is reproduced as under
:

"In the case of Rashtriya Mill
Mazdoor Sangh (supra), it has been held by
the Apex Court that the liability of payment
of gratuity to its employees/workmen whose
management has been taken over under
Textile Undertakings Act, 1983 by NTC in
respect of period prior to taking of
undertaking would not be of NTC and NTC
is not liable to pay the amount of gratuity
payable under the Payment of Gratuity
Act....."

In the instant case, from the record it
is evidently clear that the liability under
Payment of Gratuity Act for payment of
gratuity to the employees/workmen who
had retired prior to the date of vesting of
Nawabganj Sugar Mill Company Limited
would not be of U.P. State Sugar
Corporation Limited. Thus, the orders
impugned are not sustainable in the eyes of
law. They are accordingly set aside. The
writ petitions are allowed."

24. The aforesaid judgment also
related to an employee who had retired
prior to date of vesting of Schedule
Undertaking
under
Act,
1971
with
UPSSCL, i.e., he was not employed on the
appointed date hence he was not transferred
to UPSSCL and thus this judgment also
does not help respondents in any manner.

25. Now coming to question of
retaining allowance, reliance is placed on
Clause-K of Standing Orders governing
Conditions of Employment of Workman in
Vacuum Pan Sugar Factories of the State
enforced
vide
notification
dated
03.10.1958. Paras 1 to 4 thereof reads as
under:

"K. Special Conditions Governing
Employment of Seasonal Workmen

1. A seasonal workman who has
worked or, but for illness or any other
unavoidable cause, would have worked
under a factory during the whole of the
second half of the last preceding season
632 INDIAN LAW REPORTS ALLAHABAD SERIES
shall be employed by the factory in the
current season and shall be entitled to get
retaining allowance provided he joins the
current season and works for at least one
month. The payment of retaining allowance
shall be made within two months of the
date of the commencement of the season.

Explanation- Unauthorised absence
during the second of the last preceding in
season of a workman who has not been
validly dismissed under these Standing
Orders and of a workman who has been reemployed by the management in the current
season, shall be deemed to have been
condoned by the management.

2. Every seasonal workman who
worked during the last season shall be put
up on his old job whether he was in the 'R'
shift or in any of the usual shifts.

However, if the exigencies of work so
require, the management may transfer a
workman from one job to another or from
one shift to another including the 'R' shift,
so however, that the number of workmen so
transferred does not exceed five per cent of
total number of the employers of the factory
and that the wages and status of such
workman is not affected in any way.

3. A seasonal workman, who is a
retainer shall be liable to be called on duty
at any time in the off season and if he does
not report for duty within ten days, he shall
lose his retaining allowance for the period
for which he was called for duty.

4. Where owing to trade reasons or
other reasons necessary for a bona fide
Law Off, as given in Standing Order 'J' it
becomes necessary for a factory so to do, it
may discharge the seasonal workman
before the close of the season with the
previous permission of the state labour
commissioner if he so directs Additional
Labour
Commissioner
or
Regional
Additional/ Deputy Labour Commissioner
of the area after paying such compensation
to the discharged workman as may be
determined by the authority granting the
permission."

26.

Applicability
of
aforesaid
provision depends on certain incidents and
facts in respect whereto I find no proper
pleading in the writ petition. In absence of
specific pleadings, disputed question of
facts i.e. paybility of retaining allowance of
workman
which
has
been
seriously
disputed by Employer, cannot be decided in
a writ petition. In this regard petitioners
have statutory alternative remedy to settle
their dispute by raising an industrial dispute
under U.P. Industrial Disputes Act, 1947
(hereinafter referred to as the "U.P. Act
1947") or Payment of Wages Act, 1936
(hereinafter referred to as "Act, 1936").

27. In view of above writ petition is
partly allowed. Respondents are directed to
pay the outstanding dues of petitioners in
respect of period when they claimed that
erstwhile employer, i.e., appointed date
under Act, 1971, i.e., 28.10.1984. This
direction also include Respondent-3, who
has to make such payment towards
provident fund to petitioners, if not already
paid. For entire amount which will be paid
by respondents under this judgment,
petitioners shall also be entitled to interest
at the simple interest of 6% per annum,
which shall be computed for the period
from the date of filing of this writ petition,
i.e., 11.02.2002 till payment is made. In
respect of retaining allowance petitioners
may avail their statutory alternative remedy
under U.P. Act, 1947 or Act, 1936.

28. There shall be no order as to costs.

Hon'ble
the
Chief
Justice
has
nominated me to pronounce this judgment
vide order dated 17.4.2020. Due to lock-
12 All. Raj Kumar Gupta Vs. State of U.P. & Ors.
633
down declared by the Central Government
and Government of U.P., the judgment is
pronounced by me today in Chamber as per
Rule 1 sub-clause (1) (2) and (3) of Chapter
VII of the Allahabad High Court Rules,
1952.

Dated20.04.2020
(Justice Virendra Kumar -II)
----------
(2020)12ILR A633
ORIGINAL JURISDICTION
CIVIL SIDE
DATED: ALLAHABAD 12.10.2020

BEFORE

THE HON'BLE AJAY BHANOT, J.

Writ A No. 4419 of 2020

Raj Kumar Gupta ...Petitioner
Versus
State of U.P. & Ors. ...Respondents

Counsel for the Petitioner:
Sri Bhagwan Dutt Pandey

Counsel for the Respondents:
C.S.C.

A. Service Law - Recruitment - Application
of the petitioner, an ex-serviceman who applied
for the post of constable in the Civil Police and
the Provincial Armed Constabulary was rejected
not on the ground that he did not possess the
domicile certificate which was consistent with
the terms of the advertisement but because he
could not produce it at the time of scrutiny of
documents. The Court directed to grant another
opportunity to produce the domicile certificate
dated 08.02.2018. (Para 22, 25)

Principles evolved by courts for administering
benefits of reservation to various communities,
can also be applied to the class of ExServicemen. Reservation cannot be construed
by the authorities in a pedantic manner. It has
to be implemented in a fashion to achieve the
object of reservations. (Para 21)
Writ Petition allowed. (E-10)

(Delivered by Hon'ble Ajay Bhanot, J.)

1. Heard Shri Bhagwan Dutt Pandey,
learned counsel for the petitioner and Shri
Jagdish Singh Bundela, learned Standing
Counsel for the State-respondents.

2. The petitioner is aggrieved by the
cancellation of his candidature in the ExServicemen category for appointment on
the post of Constable in the Civil Police
and PAC.

3.