Bombay High Court
Kamala Mills Limited vs Mr. Sobhran Sriram on 20 December, 2013
Bench: M.S. Sonak
DSS wp 248.11 @ wp 857.11
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
ORDINARY ORIGINAL CIVIL JURISDICTION
WRIT PETIITON NO.248 OF 2011
Kamala Mills Limited ]
S.B. Marg, Lower Parel, ]
Mumbai-400 013 ] .. Petitioner
vs.
1. Mr. Dilip Kumar G. Damani ]
2. Mr. B.M. Singhania ]
3. Mr. S.N. Lodha ]
4. Mr. K.L. Vyas ]
5. Mr. K.N. Mishra ]
6. Mr. O.P. Saini ]
7. Mr. A.J. Merchantig ]
8. Mr. S.G. Kawle ]
9. Late S.K. Sharma (through ]
legal heir Sushila Sharma) ]
10. Mr. P.R. Sharma ]
1. Mr. Sobhran Sriram ]
2. Mr. B.K. Dave ]
3. Late R. G. Parekh (through ]
legal heir wife Kantaben ]
R. Parekh) ]
14. Mr. S.G. Chanda ]
15. Mrs. Geeta Sharma ]
(All c/o. C-602, Sai Tower ]
Old MHB Colony, Gorai ]
Road, Borivli (W), ]
Mumbai-400 091 ]
16. Presiding Officer ]
st
1 Labour Court, Administrative]
Building, 1st Floor, near ]
Chetana College, Govt.Colony ]
Bandra (E), Mumbai-400 051 ] .. Respondents
WITH
WRIT PETITION NO.857 OF 2011
1. Mr.Dilip Kumar G. Damani ]
2. Mr. B.M. Singhania ]
3. Mr. S.N. Ladha ]
4. Mr. K.L. Vyas ]
1/34
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5. Mr. K.N. Mishra ]
6. Mr. O.P. Saini ]
7. Mr. A.J. Merchant ]
8. Mr. S.G. Kawale ]
9. Late S.K. Sharma (through ]
legal heir Sushila Sharma) ]
10. Mr. P.R. Sharma ]
(All c/o. C-602, Sai Tower ]
Old MHB Colony, Gorai ]
Road, Borivli (W), ]
Mumbai-400 091 ] .. Petitioners
vs.
Kamala Mills Limited ]
S.B. Marg, Lower Parel, ]
Mumbai-400 013 ig ] .. Respondent
*****
Mr. K.M. Naik, Sr. Advocate a/w. Mr.Sujeet P. Salkar for the Petitioner in
W.P.No.248/11 and Respondent in W.P.No.857/11.
Mr. Arshad Shaikh a/w. Mr.Kedar Dighe for the Petitioner in W.P.No.857/11
and Respondents in W.P.No.248/11.
*****
CORAM : M.S.SONAK, J.
Judgment reserved on : 6th December 2013
Judgment pronounced on: 20th December 2013
JUDGMENT. :-
1] These two petitions concern order dated 21.10.2010 passed by the
1st Labour Court at Mumbai in Application (IDA) No. 64 of 2008, in
purported exercise of powers conferred by Section 33-C(2) of the
Industrial Disputes Act, 1947 (said Act). The order dated 21.10.2010 shall
hereinafter referred to as the impugned order. So also for the sake of
convenience, the Kamala Mills Limited-employer shall hereinafter be
DSS wp 248.11 @ wp 857.11
referred to as the 'Petitioner' and Respondent Nos.1 to 15-employees,
shall, unless they context requires otherwise, be collectively referred to as
the 'Respondents'.
2] The brief circumstances in which the impugned order came to be
made are as follows:-
(a) The Kamala Mills Limited, operated a mill (Textile
Industry), head office and retail shop, which position is not in
dispute;
(b) In pursuance of a general charter of demands raised by
the employees of the Petitioner, the Industrial Tribunal made
an award in or around the year 1980. According to the
Petitioner, this award covers all the employees, i.e., employees
of the mill, head office and retail shop. However, according to
the Respondents who are the employees of the head office
and retail shop, this award concerned only the mill employees
and not the head office/retail shop employees.
(c) Aggrieved by the award, the Petitioner preferred Civil
Appeal No.2951 of 1980 directly before the Supreme Court
invoking the jurisdiction under Article 136 of the Constitution of
India;
(d) During the pendency of the aforesaid Civil Appeal, the
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Petitioner came to be declared as 'sick company' on 27.1.1987
by the B.I.F.R. under the provisions of Sick Industrial
Companies Act, 1985 (SICA);
(e) According to the Petitioner, the mill, head office and retail
shop closed operations with effect from 7.11.1988. Settlement
talks continued with the employees, which ultimately resulted
in an agreement dated 21.10.1992 between the Petitioner and
the Rashtriya mill Mazdoor Sangh (RMMS), a representative
Union within the meaning assigned to this term under the
Bombay Industrial Relations Act, 1946 (BIRA).
(f) While it is the case of the Petitioner that the agreement
dated 21.10.1992 applied to all employees, the Respondents
contend that the RMMS was representative Union only in so
far as mill employees were concerned and therefore the
agreement did not apply to employees at the head office and
retail shop like the Respondents.
(g) The agreement dated 21.10.1992 came to be considered
by the BIFR in the context of a scheme for restructuring the
Petitioner. The Respondents, represented by late Mr. S.K.
Sharma (who was himself one of the employees of the head
office) were heard by the BIFR in support of their contentions
that the agreement dated 21.10.1992 was not applicable to
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them and in any case, ought not to be made applicable to
them. The BIFR by its order dated 6.7.1993 overruled the
contentions of the Respondents and accepted the agreement
dated 21.10.1992 whilst approving the scheme for restructuring
of the Petitioner;
(h) The Respondents, again through late Mr. S.K. Sharma
carried the matter in appeal before AAIFR impugning the BIFR
Order dated 6.7.1993 and reiterating the same contentions.
The AAIFR, however, dismissed the appeal by order dated
30.9.1993.
(i) Respondent Nos.1 to 10 (head office employees), again
represented by Mr. S.K. Sharma preferred Special Civil
No.6880 of 1981 before the Supreme Court of India, inter alia
impugning the BIFR order dated 6.7.1993 and AAIFR order
dated 30.9.1993.
(j) Civil Appeal No.2951 of 1980 (impugning award of
Industrial Tribunal as aforesaid) and SLP Civil No.6880 of 1981
came to be heard together and were disposed of by the
Supreme Court vide common judgment and order dated
29.3.1994. The Supreme Court, in terms accepted the
agreement dated 21.10.1992 as being fair and reasonable
rejecting contentions made by and on behalf of Respondent
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Nos.1 to 10 and finally modified award of the Industrial Tribunal
so as to bring the same in accord with the agreement dated
21.10.1992.
(k) The Petitioner contends that they have implemented the
agreement dated 21.10.1993 as approved by the Supreme
Court in its order dated 29.3.1994 in respect of all its
employees, i.e., employees at the mill, head office and retail
shop. However, as some employees at the head office and
retail shop like the Respondents declined to accept benefits,
the Petitioner deposited an amount of Rs.9,52,387/- being the
amount payable to the Respondents in terms of agreement
dated 21.10.1992 with the Maharashtra Labour Welfare Board
for the purposes of payment to the Respondents.
(l) There is no clear record of the Respondents making any
serious efforts either to recover amounts in terms of agreement
dated 21.10.1992 or the amounts which thereafter came to be
claimed in the application made under Section 33-C(2) for the
period between 1994-2005. In the year 2005, however, the
Respondents preferred Contempt Petition No.221 of 2005
before the Supreme Court alleging failure on the part of the
Petitioner to implement and comply with the order dated
29.3.1994, which had approved the agreement dated
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21.10.1992 and even modified the award of the Industrial
Tribunal so as to bring the same in accord with agreement
dated 21.10.1992.
(m) The delay in filing the contempt petition was condoned.
But the contempt petition came to be dismissed by the
Supreme Court by its order dated 28.10.2005. Liberty was
however, granted to the Respondents to seek appropriate
remedy before the appropriate forum.
(n)
In the year 2008, relying upon liberty as aforesaid, the
Respondents preferred Application (IDA) No.64 of 2008
invoking the powers of the Labour Court under Section 33-C(2)
of the said Act, seeking payments not merely in terms of
agreement dated 21.10.1992 as approved by the Supreme
Court in its order dated 29.3.1994 but further arrears of wages
and wages on the basis that services of Respondent Nos.1 to
6, 10 to 15 have never been terminated and they continued to
be in service. In so far as Respondent Nos.7 and 8 are
concerned, it was stated that they have resigned services with
effect from 16.1.1995 and 4.1.1995 and therefore arrears of
wages be paid upto 21.10.1992.
(o) The Labour Court vide the impugned order dated
21.10.2010 has substantially allowed the Respondent's
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application.
(p) The Petitioner vide Writ Petition No.248 of 2011
challenges the impugned order in its entirety. Respondent
Nos.1 to 10 vide Writ Petition No.857 of 2011 challenge the
impugned order to the extent it does not grant them reliefs in
entirety.
3] By the impugned order, the Labour Court has directed the
Petitioner:
(i) To pay the Respondents' amounts in accordance with the
Supreme Court order dated 29.3.1994 and agreement dated
21.10.1992;
(ii) To pay Respondent Nos.1 to 6, 9 and 10 arrears of
wages and other benefits for the period between closure of the
mill, i.e.,7.11.1988 upto the date of agreement, i.e., 21.10.1992
"as payable, provided, stipulated & allowed in the settlement
BIFR & order of the Hon'ble Supreme Court in Civil Appeal
No.1951 of 19801 decided alongwith S.L.P. No.6880 of 1981".
(iii) To pay Respondent Nos.7 and 8 unpaid wages, if so far
not paid from if so far not paid from 7.11.1988 upto 16.1.1995 &
4.1.1995 together with gratuity, retrenchment compensation, so
far as not paid to be worked out on the basis of the period of
1 This should be Civil Appeal No.2951 of 1980
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their service calculated upto the actual date of resignation i.e.,
16.1.1995 & 4.1.1995 respectively.
(iv) To pay Respondent Nos.11 to 15, if not so not paid their
unpaid salary from 7.11.1988 or from the actual date of non
payment till the date of their retirement or upto the date or "upto
the date of separation of their services, if any, either by
retrenchment or termination by following due process of law,
whichever earlier, alongwith all other benefits which they shall
be entitled for within that period".
4] Mr. Naik, learned senior counsel appearing for the Petitioner, at the
outset, submitted that the Petitioner has already complied with its
obligation arising out of the agreement dated 21.10.1992 as approved by
the Supreme Court in its order dated 29.3.1994. He further submitted that
in case there is any short fall in the amounts paid, or deposited, then the
Petitioner, without prejudice to its contention based upon delay and
laches, is willing to make good the short fall. In support of the petition, Mr.
Naik made the following submissions:
(a) The very application under Section 33-C(2) was barred
by law of limitation or in any case, on account of inordinate
delay and laches. To substantiate this submission, Mr. Naik
placed reliance upon two decisions of this Court in the case of
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S.A. Shaikh v. Union of India & ors. 2 and Union of India
(through General Manager), Western Railway v. P.S. Pansora 3 ,
which provide that merely because Limitation Act has not been
made applicable to proceedings under Section 33-C (2) of the
said Act, that by itself does not entitle a Labour Court to
entertain old and stale claims;
(b) All claims, including in particular the claims on the basis
that the Respondents services have not been terminated,
cannot be said to be based upon any 'existing or determined
rights'. Considering the scope and import of Section 33-C(2) of
the said Act, therefore, the Labour Court has acted in excess of
its jurisdiction in entertaining the same. Reliance was placed
upon the cases of the Supreme Court in Municipal
Corporation of Delhi v. Ganesh Razak & anr. 4 and
U.P. State Road Transport Corporation v. Birendra Bhandari 5,
for this proposition.
(c) Assuming, without admitting that the Labour Court has
acted within its jurisdictional bounds, the impugned order is
vitiated by unreasonableness and perversity. The relevant
materials, including in particular, scope and import of the
2 2002 III CLR 132
3 2002 (1) L.L.N.844
4 1995 1 CLR 170
5 2006 III CLR 672
DSS wp 248.11 @ wp 857.11
Supreme Court order dated 29.3.1994 has been ignored. The
reasoning is vitiated by non-application of mind as well as
errors apparent on the face of record. For these reasons, the
impugned order warrants interference.
5] Mr. Shaikh, learned counsel appearing for the Respondents
countered the submissions of Mr. Naik and went on to make submissions
of his own. The same were broadly as follows:
(a)
The agreement between the Petitioner and RMMS dated
21.10.1992, was restricted to the mill employees and could not
be extended to the Respondents, who admittedly were
employees at head office/retail shop. This is because the
RMMS was a representative Union in terms of the Bombay
Industrial Relations Act, 1946 (BIRA), which act in terms of
Notification issued thereunder applied only to mills and not to
head office or retail shop. Reliance was placed upon the
decision in the cases of Krishna Ganapat Kasar vs. India
United mills No.2 & Anr.6 and National Textile Corpn. (South
Mah.) Ltd. vs. Ashok Shridhar Athavale & ors.7 in support of this
submission;
(b) There is nothing in the orders made by BIFR, AAIFR or
6 2004 II CLR 430
7 1992-(002)-LLJ-0403-Bom
DSS wp 248.11 @ wp 857.11
the Supreme Court of India, which either notes or approves the
termination of the Respondents' services by reference to
agreement dated 21.10.1992. Therefore based upon such
orders or agreement dated 21.10.1992, no inference much less
any conclusion can be drawn of severance of 'employer-
employee relationship';
(c) Even otherwise severance of 'employer-employee
relationship' in the labour arena can take place inter alia by
closure of
the industry, abolition of post, resignation,
retrenchment or termination. Except in so far as Respondent
Nos.7 and 8 who have resigned with effect from 16.1.1995 and
4.1.1995 respectively, none of the modes of severance are
attracted to the case of remaining Respondents. Even in so far
as Respondent Nos.7 and 8 are concerned, the circumstance
that the Petitioner accepted their resignation in the year 1995 is
by itself a clear pointer that even the Petitioner regarded them
as being in services in the year 1995. The circumstance that
such a resignation were purported to be accepted with effect
from 7.11.1988 is quite irrelevant, apart from the same being
impermissible and illegal. The impugned order which proceeds
upon such basis is right, both on facts as well as in law. The
error in the impugned order is only to the extent it denies
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Respondent Nos.1 to 6, 9 and 10 the same benefits as have
been granted to Respondent Nos.11 to 15. Therefore, Writ
Petition No.857 of 2011 by Respondent No.1 to 10 ought to be
allowed.
(d) The Petitioner is unclear whether the alleged severance
of 'employer-employee relationship' was brought up on account
of closure of industry or abolition of post. From the recitals in
the agreement dated 21.10.1992, it is clear that there was no
closure of industry, but rather the agreement was for the
purposes of revival of industry by down sizing staff. There was
never any compliance with statutory pre-condition for effecting
of closure. Further there cannot be any abolition of post
contrary to provisions of Section 9A read with item 11 of IV th
Schedule to the said Act. In such circumstances, there was
neither any de facto nor de jure severance of 'employer-
employee relationship'. In the context of Section 9A of the said
Act, reliance was placed upon the decision of the Supreme
Court in the case of Chaganlal Textile mills (Private) Limited V.
Chalisgaon Girni Kamgar Union8.
(e) In exercise of powers under Section 33-C (2) though the
Labour Court may not be entitled to go into the question as to
whether termination of services was legal or proper, that does
8 1959-(002) -LLJ -0001-SC
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not preclude the Labour Court from determining whether in fact
there has been any termination or not. The Labour Court having
adopted such an approach, has acted within the bounds of its
jurisdiction and there is no perversity whatsoever in the findings
returned.
6] As regards, the first submission of Mr. Naik based upon the
applicability of law of limitation is concerned, there is ample judicial
authority loaded against the proposition advanced. It seems that where the
legislature has made no provision for limitation, it would not be open to the
courts to introduce any such limitation on grounds of fairness or justice.
The words of Section 33-C(2) are plain and unambiguous and it would be
the duty of the Labour Court to give effect to the said provision without any
consideration of limitation. In the absence any provision for limitation, the
Labour Court cannot import any such consideration in dealing with the
applications made under Section 33-C(2) 9. The Full Bench of this Court in
P.K.Porwal (Manager) v. Labour Court, Nagpur 10, had held that the
residuary provision contained in Article 137 of the Limitation Act of 1963
applies to application under Section 33-C(2) of the Industrial Disputes Act,
1947. In the case of Town Municipal Council, Athani v. The Presiding
Officer, Labour Court, Hubli11, the Supreme Court has disapproved the Full
9 The Bombay Gas Co.Ltd. v. Gopal Bhiva & ors - AIR 1964 SC 752
10 (1968) 2 LLJ 505
11 Civil Appeals Nos.170 to 173 of 1968, decided on 20.3.1969
DSS wp 248.11 @ wp 857.11
Bench decision of this Court. This was noted by the Supreme Court itself
in the case of Management of State Bank of Hyderabad vs. Vasudev
Anant Bhide Etc.12, which reiterated the position that the Limitation Act of
1963 does not apply to application under Section 33-C (2) of the said Act,
and that no limitation is prescribed for such applications.
7] On the aspect of delay and laches, learned Single Judge of this
Court in the cases of S.A. Shaikh vs. Union of India and Western
Railway vs. P. S. Pansora
ig (supra) has ruled that the applications filed
after inordinate and unexplained delay deserve dismissal, because it was
unreasonable to expect the Railway Authorities to preserve records
at this length of time. However, perusal of fact situation in the said
cases would reveal that in the intervening period, Railway Authorities had
destroyed the documents/materials essential for purposes of defence.
Further in the said cases, there was no explanation whatsoever in respect
of inordinate delay and laches. In the present case, the Respondents did
approach the Supreme Court by way of Contempt Petition No.221 of 2005
seeking implementation of order dated 29.3.1994. The delay in filing the
contempt petition was condoned by the Supreme Court and further liberty
was also granted to the Respondents to seek appropriate remedy before
the appropriate forum. In such circumstances, although there is delay on
the part of the Respondents in approaching the Labour Court, the said
12 1969 (2) Supreme Court Cases 491
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Court having exercise its discretion in entertaining the application on
merits, I do not deem it appropriate at this stage to interfere with the
exercise of such discretion and to non suit the Respondents on the
grounds of delay and laches. The aspect of delay shall, however, have a
bearing upon other issues raised by the parties in these proceedings.
8] The moot issue which arises in these petitions is the scope and
import of proceedings under Section 33-C(2) of the said Act, 1947, which
reads thus:
"S.33C(2) - Where any workman is entitled to receive from the
employer any money or any benefit which is capable of being
computed in terms of money and if any question arises as to
the amount of money due or as to the amount at which such
benefit should be computed, then the question may, subject to
any rules that may be made under this Act, be decided by
such Labour Court as may be specified in this behalf by the
appropriate Government (within a period not exceeding three
months)
Provided that where the presiding officer of a Labour
Court considers it necessary or expedient so to do, he may,
for reasons to be recorded in writing, extend such period by
such further period as he may think fit".
9] The proceedings under Section 33-C(2) of the said Act are in the
nature of execution proceedings. The benefit sought to be enforced under
Section 33-C(2) of the said Act has to necessarily be a pre-existing benefit
or one flowing from a pre-existing right. The difference between pre-
existing right or benefit on one hand and the right or benefit, which is
DSS wp 248.11 @ wp 857.11
considered just and fair on the other hand, is vital. The former falls within
the jurisdiction of the Labour Court exercising powers under Section 33-
C(2) of the said Act while later does not. In entertaining a claim under
Section 33-C(2) of the said Act, Labour Court must clearly understand the
limitation under which it is to function. The Labour Court cannot arrogate
itself the function of an Industrial Tribunal, which alone is to make
adjudication upon a reference made under Section 10 of the said Act. No
claim in respect of a matter not based on any existing right can be
entertained under Section 33-C (2) of the said Act. By merely making a
claim in a loaded form the workmen cannot give the Labour Court
jurisdiction under Section 33-C(2) of the said Act13.
10] Remedy of Section 33-C(2) of the said Act is available only when
there is no dispute about entitlement of the workman. That remedy cannot
be invoked in a case where the entitlement is disputed. In the case of
Chief Superintendent, Government Livestock Farm Hissar vs. Ramesh
Kumar14, the Supreme Court held that the issue whether a daily wager
Welder is entitled to pay and benefits equal to that of a regular Welder
could not be determined in proceedings under Section 33-C(2). The
proper course is to have the entitlement to regular scale determined by a
competent court or tribunal and in the event of non payment of the amount
13 Central Inland Water Transport Corporation Ltd. vs. The Workmen and Anr., (1974) 4 SCC 696 &
U.P. State Road Transport Corporation v. Bijendra Bhandari - 2006 III CLR 672
14 (1997) 11 SCC 363
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payable as per the entitlement, remedy under Section 33-C(2) could be
invoked, but not otherwise.
11] In the context of Section 6-H (1) of U.P. Industrial Disputes Act,
1947, which is pari materia with Section 33-C(2) of the said Act, the
Supreme Court has held that the provision is in the nature of execution
proceeding. The provision can be invoked inter alia in the event any
money is due to the workmen under an award. The provision cannot be
invoked in a case where ordinarily an industrial dispute can be raised and
can be referred for adjudication by the appropriate Government to an
Industrial Court. The Authorities to determine a matter arising under
Section 6-H of the U.P. Act and an industrial dispute raised by the
workmen are different. Section 6-H (1) of the Act, it will bear repetition to
state, is in the nature of an execution proceedings. The Authority vested
with the power thereunder cannot determine any complicated question of
law. It cannot determine a dispute in regard to extent of a legal right. It
cannot usurp the jurisdiction which is not vested in it15.
12] In the case of State of Bank of India v. Ram Chandra Dubey &
ors.16, the Industrial Tribunal upon a reference under Section 10 found that
the termination of services of the workmen was not legal and justified and
15 Hamdard (WAKF) Laboratories vs. Dy. Labour Commissioner and ors.- (2007) 5 SCC 281
16 (2001) 1 Supreme Court Cases 73
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that workmen concerned were entitled to reinstatement from the date of
termination. However, no finding was given in regard to payment of back
wages. Therefore, the workmen filed an application under Section 33-C(2)
seeking computation of back wages on the basis of award of the Industrial
Tribunal. The Supreme Court, however, rejected such claim by observing
thus:
"7. When a reference is made to an Industrial Tribunal to
adjudicate the question not only as to whether the termination
of a workman is justified or not but to grant appropriate relief,
it would consist of examination of the question whether the
reinstatement should be with full or partial back wages or
none. Such a question is one of fact depending upon the
evidence to be produced before the Tribunal. If after the
termination of the employment, the workman is gainfully
employed elsewhere it is one of the factors to be considered
in determining whether or not reinstatement should be with
full back wages or with continuity of employment. Such
questions can be appropriately examined only in a reference.
When a reference is made under Section 10 of the Act, all
incidental questions arising thereto can be determined by the
Tribunal and in this particular case, a specific question has
been referred to the Tribunal as to the nature of relief to be
granted to the workmen.
8. The principles enunciated in the decisions referred by
either side can be summed up as follows:
Whenever a workman is entitled to receive from his
employer any money or any benefit which is capable of being
computed in terms of money and which he is entitled to
receive from his employer and is denied of such benefit can
approach Labour Court under Section 33-C(2) of the Act. The
benefit sought to be enforced under Section 33-C(2) of the
Act is necessarily a pre-existing benefit or one flowing from a
pre-existing right. The difference between a pre-existing right
or benefit on one hand and the right or benefit, which is
considered, just and fair on the other hand is vital. The former
falls within jurisdiction of Labour Court exercising powers
under Section 33-C(2) of the Act while the latter does not. It
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cannot be spelt out from the award in the present case that
such a right or benefit has accrued to the workman as the
specific question of the relief granted is confined only to the
reinstatement without stating anything more as to the back
wages. Hence that relief must be deemed to have been
denied, for what is claimed but not granted necessarily gets
denied in judicial or quasi-judicial proceeding. Further when a
question arises as to the adjudication of a claim for back
wages all relevant circumstances which will have to be gone
into, are to be considered in a judicious manner. Therefore,
the appropriate forum wherein such question of back wages
could be decided is only in a proceeding to whom a reference
under Section 10 of the Act is made. To state that merely
upon reinstatement, a workman would be entitled, under the
terms of award, to all his arrears of pay and allowances would
be incorrect because several factors will have to be
considered, as stated earlier, to find out whether the workman
is entitled to back wages at all and to what extent. Therefore,
we are of the view that the High Court ought not to have
presumed that the award of the Labour Court for grant of back
wages is implied in the relief of reinstatement or that the
award of reinstatement itself conferred right for claim of back
wages".
13] Though in determining the scope of Section 33-C(2) of the said Act,
care must be taken not to exclude cases which ultimately fall within its
purview, it must also be borne in mind that cases which fall within the
purview of Section 10(1) of the said Act, cannot be brought within the
scope of Section 33-C (2) of the said Act. Whilst it may be open to a
Labour Court in appropriate cases to interpret the award or settlement on
which the claim is based, the Labour Court cannot go behind the award or
settlement, nor can it add to or subtract from the provision of the
settlement or award. If an employee is dismissed or demoted and it is his
DSS wp 248.11 @ wp 857.11
case that the dismissal or demotion is wrongful, it would not be open to
him to make a claim for recovery of his salary and wages under section
33-C(2). His demotion or dismissal may give rise to an industrial dispute
which may be appropriately tried, but once it is shown that the employer
has dismissed or demoted him, a claim that the dismissal or demotion is
unlawful and therefore the employee is continued to be the employee of
the workman of the employer and is entitled to the benefits due to him
under a pre-existing contract, cannot be made under Section 33-C (2)17.
14] Applying the aforesaid principles, which deal with the scope and
import of proceedings under Section 33-C(2) of the said Act to the present
case, in my judgment, the Labour Court in exercise of powers under
Section 33-C(2) could have only entertained the claim based upon
agreement dated 21.10.1992 as approved by the Supreme Court in its
order dated 29.3.1994. To the extent therefore, the Labour Court directs
payments (if not already made) in terms of agreement dated 21.10.1992
as approved by the Supreme Court in its order dated 29.3.1994, there is
no reason to interfere. However, considering the ambiguity in the
impugned order, it is clarified that the directions are liable to be issued to
the Petitioner to pay to the Respondents (if not already paid or deposited)
the following amounts:
17 The Central Bank of India Ltd. v. P.S. Rajagopalan - AIR 1964 Supreme Court 743
DSS wp 248.11 @ wp 857.11
(a) unpaid wages, if any, upto 7.11.1988; and
(b) Amounts towards gratuity, retrenchment compensation
and other statutory dues upto 7.11.1988;#
#Gratuity and retrenchment compensation shall be
calculated on the basis of wages comprising basic wages and
D.A. as were drawn by the concerned workman as on the
date of the closure of the mills. However, in the computation
of the length of the service of the employees, the period
commencing from the date of closure of the mill, i.e.,
7.11.1988 to the date of the memorandum of understanding
(21.10.1992) shall also be included.
15] The Labour Court has failed to ascertain whether or not the
amounts as aforesaid have been paid or deposited by the Petitioner. The
Petitioner has placed material on record evidencing deposit of a sum of
Rs.9,52,387/- with the Maharashtra Labour Welfare Board towards
payment of such amount, since according to the Petitioner the
Respondents despite the offer, declined to accept the same. The Officer
from the Maharashtra Labour Welfare Board, who was summoned to
depose in the matter has confirmed such deposit as against the names of
15 Respondents.
DSS wp 248.11 @ wp 857.11
Sr.No. Name of the employee Amount
(in Rs.)
1 B.M. Singhania 95,306.00
2 D.K. Samani 73,126.00
3 K.L. Vyas 87,593.00
4 K. N. Mishra 1,06,592.00
5 O.P. Saini 95,503.00
6 P.R. Sharma 87,783.00
7 S.K. Sharma
ig 1,55,614.00
8 S.N. Laddha 94,294.00
9 B.K. Dave 26,904.00
10 Sobran Shiram 24,880.00
11 S.R. Chanda 20,839.00
12 R.G. Parikh 24,642.00
13 Geeta Sharma 24,242.00
14 Prahlad Sharma 21,171.00
15 Laltaprasad Pande 19,885.00
DSS wp 248.11 @ wp 857.11
16] This Court at the stage of grant of rule and interim reliefs by order
dated 23.2.2011, had directed the Petitioner as a pre-condition for interim
stay to pay to the concerned workmen in terms of the agreement dated
21.10.1992 and order of the Supreme Court, if not already paid. At that
stage, it was pointed out by Mr. Naik appearing for the Petitioner that
some amounts have been paid. Mr. Shaikh appearing for the Respondents
pointed out that amounts have not been paid, but have been deposited
with the Maharashtra Labour Welfare Board. Accordingly, this Court held
that the Respondents shall be entitled to withdraw the sums so deposited
but without prejudice to the rights and contentions of the parties. In respect
of Respondent Nos.7 and 8, interim stay was granted subject to the
Petitioner depositing the amount of unpaid wages from 7.11.1988 till
21.10.1992. The interim order had made it clear that if some amounts in
respect of the Respondents is lying deposited with the Labour Board,
amounts to be deposited in terms of agreement dated 21.10.1992 and the
Supreme Court order, shall exclude the said deposited amount and only
the deficit shall be made good by the Petitioner.
17] In case, the amounts reflected in the aforesaid Chart together with
the amounts deposited/paid in terms of the interim order dated 23.2.2011
do not correspond with the amounts to be determined as per directions
contained in paragraph 14 of this judgment and order, then the Petitioner
DSS wp 248.11 @ wp 857.11
true to its statement made through his learned senior counsel, shall make
good the short fall within a period of four weeks from the date of this
judgment and order. Upon such short fall, the Petitioner is directed to pay
interest at the rate of 6% per annum from 29.3.1994 till date of payment.
The directions to pay interest have been made taking into consideration
the peculiar facts and circumstances of the present case. The rate has
been determined by taking into consideration the circumstance that the
Respondents failed to approach the statutory authorities within reasonable
time and therefore it may not be proper to saddle the Petitioner with any
higher rate of interest. So also, once it is determined that there was a short
fall, it may not be proper that the workmen are deprived of interest upon
such short fall. Needless to mention that the Respondents shall be entitled
to withdraw from the Maharashtra Labour Welfare Board the amounts
indicated against their names in the aforesaid Chart alongwith interest, if
any, as may have been accrued thereon.
18] In case there is any difficulty in obtaining the aforesaid amounts
from the Maharashtra Labour Welfare Board, the Respondents are at
liberty to approach the Labour Court, which shall issue appropriate
directions to the Maharashtra Labour Welfare Board for the purposes of
ensuring that the Respondents obtain the said amounts within a
reasonable period from the Board. The Labour Court, if approached shall
DSS wp 248.11 @ wp 857.11
endeavour to dispose of the proceedings before it within a period of eight
weeks.
19] The impugned order to the extent it directs payments over and
above payments to be computed in terms of agreement dated 21.10.1992,
in my judgment, is vitiated by jurisdictional errors, as also errors apparent
on face of record.
20]
The impugned order had directed payment of arrears of wages to
Respondent Nos.7 and 8 upto 16.1.1995 and 4.1.1995, even though the
said Respondents had applied for payment of wages only upto
21.10.1992. This was a clear error apparent on face of record. Further the
Labour Court directed payment of arrears of wages for the period between
7.11.1988 (i.e. date of closure) and 21.10.1992 (i.e. date of agreement).
This is again a result of misreading the terms contained in the agreement
dated 21.10.1992. Mr. Shaikh's defence, by reference to a stray sentence
from the Supreme Court's order dated 29.3.1994, is quite unfounded. The
Supreme Court order dated 29.3.1994 is required to be read in its entirety
and a stray sentence cannot be read out of the context. The Supreme
Court, in terms approves the agreement dated 21.10.1992 and by way of
final relief modifies award of the Industrial Tribunal so as to bring the same
in accord with the agreement dated 21.10.1992. Therefore, particularly in
DSS wp 248.11 @ wp 857.11
proceedings under Section 33-C (2) of the said Act, the Labour Court
could not have directed any payments over and above those specified in
the agreement dated 21.10.1992.
21] The contentions of Mr. Shaikh as recorded in paragraph 5 of this
judgment and order stand substantially answered by reference to the
Supreme Court order dated 29.3.1994, which is transcribed below in its
entirety:-
"We have heard the parties. There is not dispute that
the appellant-mills was declared sick on 27.01.1977 (1987)
and ultimately it was closed on 07.11.1988. Thereafter, the
BIFR framed a Scheme for reconstituting the company on
06.07.1993. An appeal filed by the Union against the said
Scheme was dismissed on 30.09.1993. It appears that
against the said dismissal, Shri. S.K. Sharma, an employee
of the Company has preferred a special leave petition in
this court which is pending and in which notice had been
issued by us today. That has nothing to do with the matters
in issue before us.
In view of the sickness of the mills and the
reconstitution of the company, there was an agreement
arrived at between the mill Mazdoor Sangh, i.e., the Union
representing the workmen of the mills and the appellant-
mills on 21.10.1992, where under the Tribunal's award
impugned in the present appeal by the mills was modified
by consent. It is not necessary to go into the details of that
agreement. Suffice it to say that what was broadly agreed
upon between the parties was that as far as the regular
employees are concerned, they would be entitled to all the
arrears of wages including dearness allowance they were
drawing on the date of the closure of the mills, viz.,
07.11.1982 (07.11.1988). The arrears of wages were to be
calculated and paid till 21.10.1992 which is the date of the
agreement. The workers were further to be paid gratuity
and retrenchment compensation on the basis of basic wage
plus dearness allowance, also calculated till 21.10.1992.
DSS wp 248.11 @ wp 857.11
There is no dispute that out of the 56 members of the
staff which included 5 technicians and 51 clerks, five
technicians have been retained and 51 clerks have been
retrenched. Out of 51 clerks, 41 have accepted the
agreement. Before us, they are represented by Shri. S.K.
Sharma who appears through his learned counsel. It was
pointed out by the learned counsel that the wages and
dearness allowance paid to the clerical staff have remained
constant since 1962 and the impugned award given by the
Tribunal had enhanced them. The purport of the agreement
in question is to deny the employees the benefit of the
improved pay-scales and the dearness allowance. He,
therefore, urged that the clerks concerned should be paid at
least the wages and the dearness allowance as awarded by
the Tribunal. We are afraid that this contention forgets the
fact that the mills which was declared as a sick unit on
27.08.1987 (27.01.1987) has since closed down and the
BIFR had to frame a scheme for reconstituting the
company. The Appellant Authority has placed its seal on the
said scheme. In the absence of the agreement in question,
the employees represented by the learned counsel would
have been required to stand in queue for their dues even
under the old scales of pay and dearness allowance. It is
not known that percentage of their dues they would have
secured by this process and when. We may also take note
of the fact that the Union has been in the field for several
years and knows where the interests of the workers lie.
They would not have reached the agreement in question if
it was not in the interests of the employees. There is no
reason to believe that the Union has sacrificed the interests
of the workmen by entering into the said agreement. In view
of this and in view of the further fact that an overwhelming
majority of the employees has accepted the agreement, we
are of the view that the agreement in question should be
accepted as a reasonable one. In the circumstances, we
allow the appeal and modify the impugned award in terms
of the agreement arrived at between the appellant - mills
and the mills Mazdoor Sangh on 21.10.1992.
In view of the order passed by this court on
10.09.1984 which directed the appellant-mills to pay fees of
the lawyer engaged by the employees, we direct the
appellant- mills to pay to the respondent's lawyer a sum of
Rs.5,000/- as his fees.
S.L.P.(C) No.6880 of 1981.
DSS wp 248.11 @ wp 857.11
In view of the order in the above appeal, the special
leave petition stands disposed of.
(emphasis supplied)
22] The contention that agreement dated 21.10.1992, does not apply to
the employees of the head office/retail shop or that the same is not fair
and proper cannot be raised by the Respondents, in the light of
observations made by the Supreme Court in its order dated 29.3.1994.
Besides, such contentions transgress the limited scope of proceedings
under Section 33-C(2) of the said Act. In the context of very similar
contentions raised by the Respondents, the Supreme Court in its order
dated 29.3.1994 has observed that in the absence of agreement in
question, the Respondents would have been required to stand in queue
for their dues even under the old scale of pay and dearness allowance and
it is not known what percentage of their dues they would have secured by
this process and when. The Supreme Court also noted the fact that the
RMMS-Union had been in the field for several years and knows where the
interest of the workers lie and that the Union would not have reached the
agreement in question, if it was not in the interest of the employees. The
order further proceeds to observe that there is no reason to believe that
RMMS has sacrificed the interest of the workmen by entering into the said
agreement. In view of this and in view of the further fact that an
overwhelming majority of the employees had accepted the agreement, the
Supreme Court expressed the view that the agreement in question should
DSS wp 248.11 @ wp 857.11
be accepted as a reasonable one.
23] There is ample material on record, particularly, in the form of
agreement dated 21.10.1992 and the order of Supreme Court dated
29.3.1994, from which the inference is almost irresistible that there was a
de facto cessation of 'employer-employee relationship' between the
Petitioner and the Respondents. The agreement and the Supreme Court
order make reference to closure with effect from 7.11.1988. This may not
be a closure as understood under the said Act, because there is material
on record as pointed out by Mr. Shaikh that even in terms of the
agreement dated 21.10.1992, the industry was to operate with a reduced
work force. Nevertheless, the material on record bears out that even the
Respondents have factually not worked at head office/retail shop since
7.11.1988. The contention that abolition of post was contrary to Section
9A or that the closure was contrary to Chapter V-B of the said Act, is a
contention quite alien to the scope and ambit of a jurisdiction of a Labour
Court under Section 33-C (2) of the said Act. If the Labour Court in
proceedings under Section 33-C(2) could not have entertained such a
contention, obviously this Court would loathe to entertain the same in
these proceedings, which question the exercise of jurisdiction by the
Labour Court.
DSS wp 248.11 @ wp 857.11
24] As pointed out earlier, although, I have held that the Labour Court
committed no jurisdictional error in entertaining the application which was
filed belatedly, nevertheless, the circumstance that the Respondents took
no steps whatsoever to assert their alleged continuance in service from
7.11.1988 for a period by virtually 15 to 16 years, is a circumstance, which
needs to be held against the Respondents, particularly, when they contend
that they continued to be in employment for all these years. Further if the
Respondents were serious about their contentions that the agreement
dated 21.10.1992 is not at all applicable to them, then there is no
explanation forthcoming as to why the Respondents contested the
agreement before the authorities under the SICA and finally the Supreme
Court. There is no explanation as to why the Respondents preferred the
contempt petition before the Supreme Court seeking enforcement of the
agreement dated 21.10.1992, which had been approved by the Supreme
Court in its order dated 29.3.1994. In any case, all these contentions, in
my judgment, were clearly alien to the scope and import of proceedings
under Section 33-C(2) of the said Act.
25] The Supreme Court in its order dated 29.3.1994 has noted that out
of 56 members of the staff, which included 5 technicians and 51 clerks,
five technicians have been retained and 51 clerks have been retrenched.
Out of 51 clerks, 41 have accepted the agreement. Respondent No.1 to 10
DSS wp 248.11 @ wp 857.11
appear to be 10 workers, who had not accepted the agreement. Upon
consideration of their objections, the Supreme Court rejected the same
and ruled that the agreement in question should be accepted as a
reasonable one. The Labour Court, in the impugned order has directed
payment of wages to ten Respondents upto 21.10.1992, which by itself
was ultra vires. In so far as Respondent Nos.11 to 15 are concerned, on
the ground that they were not parties before the Supreme Court, the
Labour Court has directed payment of wages until there is cessation of
'employer-employee relationship'. This direction is also ultra vires. Based
upon this direction, it is impermissible for Respondent Nos.1 to 10 to seek
parity. It is trite that there can be no equality of illegalities. In any case,
equality is restored by holding that none of the Respondents in
proceedings under Section 33-C(2) of the said Act are entitled to any
amounts over and above those to be determined in accordance with the
agreement dated 21.10.1992. There is accordingly no merit in Writ Petition
No.857 of 2011, which is liable to be dismissed.
26] In the aforesaid circumstances, the following order is passed:-
A] Writ Petition No.857 of 2011 is dismissed and Rule made
therein is discharged.
B] Writ Petition No.248 of 2011 is partly allowed.
DSS wp 248.11 @ wp 857.11
C] The impugned judgment and order is quashed and set aside
except to the extent it directs the payments to the Respondents
strictly in terms of agreement dated 21.10.1992 (as interpreted in
paragraph 14 of this judgment), if not already made or deposited;
D] The Respondents are held entitled to receive from the
Maharashtra Labour Welfare Board the amounts set out against
their respective names in the Chart at Paragraph 15 of this
judgment and order by applying to the Maharashtra Labour Welfare
Board. The amounts alongwith accrued interest, if any, shall be
paid by the Board to the Respondents within four weeks from the
date of such application. In case there is any difficulty in obtaining
such amounts from the Board, the Respondents are at liberty to
approach the Labour Court, which shall entertain such applications
and pass appropriate orders thereon as observed in paragraph 18
of this judgment and order.
E] In the event the amounts referred to in the Chart in
paragraph 15 together with the amounts deposited/paid in terms of
the interim order dated 23.2.2011 do not correspond with the
amounts to be determined as per the directions in paragraph 14 of
this judgment and order, the Petitioner shall make good the short
fall within a period of four weeks from the date of this judgment and
order. Upon short fall, the Petitioner shall pay interest at the rate of
DSS wp 248.11 @ wp 857.11
6% per annum from 29.3.1994 till the date of effective payment.
F] In the unlikely event of the amounts already paid (not merely
deposited) by the Petitioner to the Respondents exceed the
amounts payable (as per directions in paragraph 14 of this
judgment and order), the Petitioner shall not take out any
proceedings for refund or recovery thereof from the Respondents.
This direction is made taking into consideration the lapse of time
and advanced age of the workmen.
G]
Upon payments as directed by this judgment and order, the
balance amount, from out of the deposits made in terms of interim
order dated 23.2.2011 shall be returned to the Petitioner by the
Registry alongwith accrued interest thereon, if any.
H] Liberty is granted to the parties to approach the Labour Court
in case of any difficulties in implementation of this order.
I] There shall be no order as to costs.
(M. S. SONAK, J.)
dinesh
