New Standard Engineering Co. Ltd. vs Ashok H. Hire And Anr.
2004 Latest Caselaw 438 Bom

ORDER

S.U. Kamdar, J.

1. The present petition is filed challenging the order passed by the Industrial Court dated 19th January 2002 in complaint (ULP) No. 91 of 2001. The complaint was filed under item 9 of Schedule IV of MRTU and PULP Act, 1971. The brief facts of the case are as under :

2. The respondent No. 1 was working with the petitioner in Arc Furnace Division since 1980. On 22nd March 1993, the respondent No. 1 was transferred from Arc Furnace Division to Foundry Section. The said order of transfer was challenged by the respondent No. 1 by filing the complaint under items 3, 9 and 10 on Schedule IV of MRTU and PULP Act, 1971. Pending the said proceedings, on 26th April 1993 the respondent No. 1 was suspended since he did not report to the transferred job in accordance with the transfer order. The charges against him were of insubordination and disobedience. Sometime in or about 1996, an enquiry was conducted. It is the admitted position that the enquiry was not concluded either by discharging the workmen or holding him guilty in respect of the said charges. On 8th January 2001, ultimately, the Industrial Court in Complaint (ULP) No. 520 of 1993 passed the order setting aside the said transfer order on the ground that there is no valid transfer order.

3. In consequence thereupon, the petitioner herein dropped the said enquiry proceedings for the charge of insubordination and did not continue the said proceedings. The respondent No. 1 was thus continued in service. The respondent No. 1 has thereafter claimed the full backwages in respect of the period of suspension from 1993 to 2001. He has also claimed the benefits during the said period under the various settlements arrived at between the petitioner and other workmen. Since the petitioner did not make payment of the aforesaid amount, the respondent No. 1 filed a complaint being complaint (ULP) No. 91 of 2001 under Item 9 of Schedule IV of MRTU and PULP Act, 1971, After considering the rival contention between the parties, the learned industrial Court by its order dated 19th January 2002 allowed the said complaint and held that the petitioner has committed unfair labour practice. It has been further directed that the petitioner shall make payment to the respondent for the sum of Rs. 3,10,300/-and also pay interest @ 12% p.a. on the aforesaid amount. By the present petition, the said order dated 19th January, 2002 passed by the Industrial Court has been challenged.

4. In the present petition, the rule was restricted by the learned Single Judge while admitting the petition only in respect of the claim of interest amount. Insofar as the principal amount of Rs. 3,10,300/- is concerned, no rule was granted. Mr. Vaidya, learned counsel appearing for the petitioner, has argued the two contentions before me, firstly, that the learned Industrial Court was not right or justified in granting any claim of interest on the amount of the difference of backwages and other benefits payable by the petitioner to the respondent No. 1. Secondly, there is no provision under MRTU and PULP Act, 1971 empowering the Industrial Court to grant the claim of interest on the outstanding amount of the backwages or other benefits. In alternative thereto, it has been further argued by the learned counsel for the petitioner that in any event, the industrial Court was wrong in granting interest for the entire period commencing from 9th April 1995 since the cause of action for claim of interest if any arises only when an earlier complaint challenging the transfer order was allowed on 8th January 2001. It is therefore, argued that the interest has to be awarded only from 8th January 2001. Mr. Vaidya further contended that the order of the industrial Court though grants simple interest @ 12% p.a. it is sought to be interpreted by respondent No. 1 as interest payable on the basis of compounding. In this respect my attention was drawn to the chart at page 42 of the said petition.

5. On the other hand, Mr. Singh the learned counsel appearing for the respondent, has contended that to grant interest is a discretionary order of the Industrial Court and this Court should not interfere with the exercise of such discretion by the Industrial Court under Article 226 of the Constitution of India. Mr. Singh has further relied upon Employee Standing Order No. 25 of the Industrial Employment (Standing Order) Act, 1946 particularly 5-A(iv) thereto, and has contended that a workman, who is placed under suspension, during the period of such suspension, be paid a subsistence allowance. The said relevant provisions of Section 25(5-A)(iv) reads as under :

"If as a result of the inquiry held or explanation tendered, it is decided not to take any action against the workman under Clause (1) the workman shall be deemed to have been on duty and shall be entitled to full wages minus such subsistence allowance as he may have already drawn and to all other privileges for the full period of suspension."

6. The learned counsel for the respondent has also relied upon Sub-clause (b) of Section 30 of MRTU and PULP Act 1971 which inter alia prescribes that when the Court decides that any person is engaged in any unfair labour practice then the Court has power over and above to grant reinstatement and back wages the power to grant reasonable compensation. The learned counsel for respondent No. 1 has drawn my attention to the Judgment of the Gujarat High Court in the case of Lataben v. Rajyaguru, Administrative Officer and Ors., 1997 (1) CLR 1043 and the Judgment of the Hon'ble Supreme Court in the case of Suresh Sakharam Chaugule and Ors. v. Parel Cotton Press Factory Pvt. Ltd. reported in 1994 Supp (3) SCC 704. It has been further contended by the learned counsel for the respondent No. 1 that the conduct on the part of the petitioner is such that the Court has rightly exercised discretion by granting interest. It has been contended that the petitioner did not conclude enquiry proceedings pursuant to the issuance of charge sheet for insubordination and that too for a period of 5 years. The enquiry was kept in abeyance without conducting the same at all and it is only when the order was passed on 8th January 2001 that the petitioner has withdrawn the said enquiry proceedings and reinstated respondent No. 1.

7. After careful consideration of the argument of both the counsels before me, I am of the opinion that though the provisions of MRTU and PULP Act, 1971 do not empower the industrial Court expressly to grant interest in favour of any of the employee, however, by virtue of the decision of the Supreme Court in the case of Suresh Sakharam Chougule (supra), the Court is empowered to grant interest depending upon the facts of each case. The aforesaid judgment of the Hon'ble Supreme Court inter alia holds as under :

"We allow the appeal set aside the order of the Labour Court dated 17-3-1983 and direct the respondent-Management to pay the backwages and bonus as claimed by the appellants. The total amount claimed by each of the appellants was Rs. 12,099.72. The Management shall deposit the said amount along with 12% interest from the date of application under Section 330C(2) of the Act before the Labour Court concerned at Bombay within three months from today. The Labour Court shall disburse the amount to the workmen concerned. The appeal is allowed with costs. We quantify the costs as Rs. 5000/- to each of the workmen."

8. In the present case, I find that non-continuation of the enquiry proceeding and/or ultimately withdrawing the same and keeping the respondent No. 1 employee out of service for a period of five years was not a suitable conduct on the part of the petitioner. Apart therefrom even after the withdrawal of the enquiry, the amount was withheld and the respondent No. 1 was dragged to the Court for the recovery thereof. This conduct on the part of the petitioner being unjustified the Industrial Court was right in granting claim with interest @ 12% p.a.

9. I also find the rate of 12% as reasonable rate of interest awarded by the Industrial Court. In any event I find no such gross error on the part of the Industrial Court in exercise of its discretion so as to call for any interference by this Court under Article 226 of the Constitution of India. Insofar as the question of date from which the payment of interest is to be allowed, I am not impressed with the argument by the learned counsel that the said interest awarded by the Industrial Court should have been from the date of 8th January 2001 when the Industrial Court quashed the transfer order. I feel so because once the transfer order is found to be invalid, the right to recover the amount is from the due date of each of the payments which were due by the petitioner employer to the respondent No. 1 employee. This amount ought to have been paid immediately at least after 8th January 2001 but the amount was not paid and a dispute as to the entitlement was still agitated. Thus, looking at the facts of the case and in the light of the Judgment of the Supreme Court I feel that respondent No. 1 was entitled to the claim of the said interest.

10. In the light of the aforesaid fact, I am of the opinion that it is not necessary for this Court to interfere with the order passed by the Industrial Court fixing the date for payment of interest. However, on reading the operative part of the order passed by the Industrial Court, I find that there has been an order of only Simple Interest on the sum of Rs. 3,10,300/- and no compound interest has been granted. Therefore, the rate of interest on the amount payable to respondent No. 1 will have to be on the basis of simple interest. Save and except the above clarification, I do not find any reason to interfere with the impugned order.

11. The petitioner has deposited the sum of 1,00,000/- in this Court pursuant to the interim order passed by this Court on 18th March, 2002. The respondent No. 1 will be at liberty to withdraw the same unconditionally and further entitled to recover the difference of the amount if any computed on the basis of simple interest alone.

12. Petition is accordingly disposed of.

13. Parties to act on a copy of this order duly authenticated by the Court Stenographer of this Court.