Syndicate Bank vs Sanjay Kapoor
2009 Latest Caselaw 2142 Del

      * IN THE HIGH COURT OF DELHI AT NEW DELHI
               + CM No. 6623/2007 in WPC No. 10465/2004
                                     Judgment reserved on: April 24, 2009
                                    Judgment delivered on: 19.05.2009
%
Syndicate Bank ...... Petitioner
                                   Through: Mr. Puneet Taneja, Advocate
Versus
Sanjay Kapoor ..... Respondents
                                   Through: Mr. C. Hari Shankar, Advocate
CORAM:
HON'BLE MR. JUSTICE KAILASH GAMBHIR
     1. Whether the Reporters of local papers                 Yes
        may be allowed to see the judgment?

     2. To be referred to Reporter or not?                    Yes
     3. Whether the judgment                                  Yes
        Should be reported in the Digest?

KAILASH GAMBHIR, J.

*

1. The present application has been filed by the respondent

workman under section 17-B of the Industrial Disputes Act for claiming

benefits under the said section.

2. The only objection taken by the petitioner Bank is that the

application has been filed by the respondent workman on 4/5/2007

after the Writ Petition in which the present application has been filed

has already been finally disposed of by this Court vide orders dated

3/11/2006.

3. The counsel for the applicant respondent contended that in

view of the decisions in the following judgments, the application should

be allowed:

1. Rajasthan State Road Transport Corporation vs. Labour Court - 1998 (1) LLJ 831 (Rajasthan);

2. DTC vs. Pratap Singh - 150 (2008) DLT 248 (Del);

3. Hans Raj Mahajan & Sons Pvt. Ltd. vs. Presiding Officer - 2001 (2) LLJ 1503 (P & H) (DB).

4. The counsel further urged that order of the Ld. Single Judge

setting aside the award dated 23/2/2004 is under challenge in an LPA

pending before the Hon'ble Division Bench and therefore, during the

pendency of appeals, the relief claimed under S.17-B ID Act is still

available to the applicant workman.

5. I have heard Ld. Counsel for the parties and perused the

record. The following question of law need to be examined in the

present case.

"Whether application filed by the workmen under section 17B can be maintained not only during the pendency of writ petition but even after the final decision of the writ petition".

6. Before dealing with the rival contentions of the parties it

would be relevant to reproduce the said provision, Section 17-B, of the

I.D. Act, which is as under:

Section 17-B :

Payment of full wages to workman pending proceedings in higher Courts :--

Where in any case, a Labour Court, Tribunal or National Tribunal by its award directs reinstatement of any workman and the employer prefers any proceedings against such award in a High Court or the Supreme Court, the employer shall be liable to pay such workman, during the period of pendency of such proceedings in the High Court or the Supreme Court, full wages last drawn by him, inclusive of any maintenance allowance admissible to him under any rule if the workman had not been employed in any establishment during such period and an affidavit by such workman had been filed to that effect in such Court :

Provided that where it is proved to the satisfaction of the High Court or the Supreme Court that such workman had been employed and had been receiving adequate remuneration during any such period or part thereof, the Court shall order that no wages shall be payable under this section for such period or part, as the case may be."

7. A perusal of the above provision would make it clear that

when an award directing reinstatement is made by the Labour Court or

Tribunal or National Tribunal and if that award is challenged in any

proceedings in the High Court or Supreme Court this section makes it

obligatory for the employer to pay the workman during the pendency

of the proceedings in the High Court or the Supreme Court full wages

last drawn by him. The Phraseology of Section 17-B is very clear. It

leaves no discretion of the court where proceedings are pending. The

employee is required to pay the workman full wages last drawn by him

during the pendency of the proceedings in High Court of Supreme

Court.

8. Section, 17-B, relates to the period during which

proceedings remain pending before the High Court or the Supreme

Court, it does not take into account any period prior to the preferring of

the proceedings in the High Court or the Supreme Court. During the

pendency of proceedings, the employer is under obligation to pay full

back wages last drawn by the employer.

9. Section 17-B of the ID Act confers valuable rights on the

workmen and correspondingly imposes onerous duty on the employer.

This is because, the Management's order of dismissal effects de facto

termination of services and this is transformed into de jure character

only once the approval is granted. If approval is declined, the

immediate consequence is that even the de facto status is reversed

and obliterated. The workman continues in service and it is open to

him to recover his wages and entitlement by pursuing the most

convenient and expeditious legal recourse available to him. By passing

the order of discharge or dismissal defacto the relationship of

employer and employee may be ended but not the de jure relationship

for that could happen only when the Tribunal accords its approval. The

relationship of employer and employee is not legally terminated till

approval of discharge or dismissal is given by the Tribunal. In a case

where the Tribunal refuses to accord approval to the action taken by

the employer and rejects the petition filed under Section 33(2)(b) of

the Act on merits the employer is bound to treat the employee as

continuing in service and give him all the consequential benefits. If the

employer refuses to grant the benefits to the emplyee the latter is

entitled to have his right enforced by filing a petition under Article 226

of the Constitution.

10. In Dena Bank v. Ghanshyam,(2001) 5 SCC 169, the

Hon'ble Apex Court dealt in detail the object and purpose of the said

provision, which is reproduced as under:

8. Section 17-B provides that where the employer prefers any proceedings against an award directing reinstatement of any workman, the employer shall be liable to pay such workman, during the period of pendency of such proceedings in the High Court or the Supreme Court, full wages last drawn by him

inclusive of any maintenance allowance admissible to him under any rule if the workman had not been employed in any establishment during such period and an affidavit by such workman had been filed to that effect in such Court. The proviso says that if the High Court or the Supreme Court is satisfied that the workman had been employed and had been receiving adequate remuneration during such period or part thereof, the Court shall order that no wages shall be payable under that section for such period or part, as the case may be.

9. The Statement of Objects and Reasons for inserting the said provision indicates that when Labour Courts pass awards of reinstatement, they are often contested by employers in the Supreme Court and High Courts. To mitigate the hardship that would be caused due to delay in implementation of the award, it was proposed to provide for payment of wages last drawn by the workman concerned from the date of the award till the dispute between the parties is finally decided in the High Courts or the Supreme Court. It follows that in the event of an employer not reinstating the workman and not seeking any interim relief in respect of the award directing reinstatement of the workman or in a case where the Court is not inclined to stay such award in toto the workman has two options, either to initiate proceedings to enforce the award or be content with receiving the full wages last drawn by him without prejudice to the result of the proceedings preferred by the employer against the award till he is reinstated or proceedings are terminated in his favour, whichever is earlier. In Dena Bank case1 this Court elucidated the expression "full wages last drawn" as follows: (SCC p.

115, para 21)

"... Parliament thought it proper to limit it to the extent of the wages which were drawn by the workman when he was in service and when his services were terminated and therefore used the words „full wages last drawn‟."

10. It may be noticed that Section 17-B of the Act does not preclude the High Courts or this Court under Articles 226 and 136 of the Constitution respectively from passing appropriate interlocutory orders, having regard to the facts and circumstances of the case, in the interests of justice (Dena Bank case1). The High Court or this Court may, while entertaining the employer‟s challenge to the award, in its discretion, in appropriate cases, stay the operation of the award in its entirety or in regard to back wages only or in regard to

reinstatement without interfering with payment of back wages or on payment of wages in future irrespective of the result of the proceedings before it etc. and/or impose such conditions as to the payment of the salary as on the date of the order or a part of the back wages and its withdrawal by the workman as it may deem fit in the interests of justice. The Court may, depending on the facts of a case, direct payment of full wages last drawn under Section 17-B of the Act only by the employer to the workman. The question whether a workman is entitled to the full wages last drawn or full salary which he would be entitled to in the event of reinstatement while the award is under challenge in the High Courts or this Court depends upon the terms of the order passed by the court, which has to be determined on interpretation of the order granting relief.

11. The object of enacting Section 17-B is to give relief to the

workman, who has award in his favour but due to pendency of

proceedings before the High Court or Supreme Court, the order of

reinstatement gets deferred and he is unable to reap the fruits of the

award. Therefore, to relieve such a workman of undue hardships

caused to him even when award is in his favour , Section 17-B, ID Act

was enacted. Delay on the part of the employer to challenge the

award without implementation of the award postpones right of the

workman to reinstatement and therefore, the employer is liable under

Section 17-B from the date of the award and not from the date of filing

of petition in High Court or Supreme Court. The relevant consideration

for passing an order under Section 17-B is that the workman had an

order in his favour for reinstatement which has been stayed and the

workman despite an order in his favour suffers unemployment.

12. The grant of benefits of S. 17-B, I.D. Act cannot be denied to a

workman if all the ingredients of S. 17-B are satisfied. Delay also

cannot defeat the right of the workman to claim benefits under S. 17-B,

I.D. Act. However, provisions of Section 17-B, debars the workman

from the benefit of Section 17-B wages, if such workman is able to

secure employment and is receiving adequate remuneration for any

period or part thereof during the pendency of proceedings before the

High Court or Supreme Court. It cannot be thus forgotten that

unreasonable and inexplicable delay on the part of the workman in

moving the application under Section 17-B of the I.D. Act would

deprive the employer to find the correct facts about the gainful

employment of workman during that period and therefore grant of

wages for such delayed period would be in negation of the right of the

employer secured under the said proviso not to pay wages to a

workman employed in some establishment and receiving adequate

remuneration. At the same time, the workman would get the

advantage of reaping double benefits of claiming Section 17-B wages

from the employer even for that period during which he was gainfully

employed.

13. Further, granting relief under Section 17B of the Act and

passing orders directing payment of wages last drawn, is generally the

rule; refusing to grant relief under Section 17B is an exception, as the

relief could be denied only in the rarest of the rare cases of

jurisdictional error or where there is no relationship of employer and

employee between the parties.

14. From the above discussion, it is manifest that the following

ingredients must be satisfied for the applicability of Section 17-B of the

ID Act:

(i) An Award is passed by a Labour Court, Tribunal or National Tribunal

directing reinstatement of a workman;

(ii) The said award is assailed by the employer in proceedings in a High

Court or the Supreme Court and the said award so far it directed

reinstatement is stayed.

(iii ) If the workman has not been gainfully employed in any

establishment during such period and an affidavit has been filed to

such effect.

15. On the satisfaction of aforesaid imperatives the High Court or

Supreme Court, as the case may be, during the pendency of

proceedings before it, can direct the employer to pay full wages last

drawn by him or the minimum wages whichever are higher, inclusive

of any maintenance allowance admissible to him under any Rule.

16. The Legislative intent behind the provision of Section 17-B of the

Act is an indication and in fact the key to the opening of the reason

and spirit of the law. The legislative emphasis on the expression

"reinstatement" and an "award" indicates that once these

requirements exist and the Award is stayed by the Court, then the

workman should not be deprived of his wages during the period of

grant of stay and disposal of the Writ Petition. A Full Bench of this

Court while dealing with intent of legislature in the case of Delhi

Transport Corporation v. Jagdish Chander 2005 II LLJ 390, held

as under:

"11. Obviously the intention of the legislature was to provide definite protection to the workman against the long litigation and exploitation by the affluent Management. As such these welfare provisions are directly relatable to the prescribed benefit to the workman under various provisions of the statute...."

17. The Court went on to say that liability to pay workman

during the pendency of the proceedings is subject to compliance of the

provisions of Section 17-B of the Act.

18. By judicial interpretation, a workman's right to grant of

interim wages, when an award in his favour directing reinstatement is

challenged before the High Court or before the Apex Court, has been

expanded and recognised as an integral part of the inherent power of

the court under Article 226 of the Constitution of India to grant

appropriate interim/pendentelite relief to a workman, having regard to

the fact situation placed before the court.

19. While considering the contentions urged it is necessary to

bear in mind that the spirit, intendment and object underlying the

statutory provision of Section 17B is to mitigate and relieve, to a

certain extent, the hardship resulting to a workman due to delay in the

implementation of an award directing reinstatement of his services on

account of the challenge laid to it by the employer. The primary

consideration for making available such a relief to a workman is to be

found in the benevolent purpose of the enactment. It recognises a

workman's right to the bare minimum to keep his body and soul

together when a challenge has been laid to an Award directing his

reinstatement. The statutory provisions provide no inherent right to

assail an order or an award by an industrial adjudicator by way of an

appeal.

20. The Apex Court in JT 2001 (Supp. I) SC 229 entitled

Regional Authority, Dena Bank and Anr. v. Ghanshyam, after

discussion and reiteration of the principles laid down in various

judgments, cautioned that the interests of the employer also could not

be ignored and held thus:

13. It must, however, be pointed out that while passing an interlocutory order the interests of the employer should not be lost sight of. Even though the amount paid by the employer under Section 17-B to the workman cannot be directed to be refunded in the event he loses the case in the writ petition (see Dena Bank case1) any amount over and above the sum payable under the said provision, has to be refunded by him. It will, therefore, be in the interests of justice to ensure, if the facts of the case so justify, that payment of any amount over and above the amount payable under Section 17-B to him, is ordered to be paid on such terms and conditions as would enable the employer to recover the same.

14. It is brought to our notice that pursuant to the orders of the High Court under challenge the appellant had paid the amount to the respondent. It is clarified that if the appellant succeeds in the writ petition, it will be entitled to recover the difference of amount (i.e. amount paid under the impugned order less the amount payable under Section 17-B of the Act) from the respondent in accordance with law.

21. No doubt, the language of Section 17B of the Act

particularly, the words 'during the period of pendency of proceedings

in the High Court' gives an impression that order regarding payment

has to be made for the period when proceedings were pending in this

Court. However, in the case of Regional Authority, Dena Bank and

Anr. v. Ghanshyam, reported in JT 2001 (Supp. 1) SC 229,

wherein the Apex Court had examined this question in paras 8, 9 and

10 as discussed above, the benefit of Section 17-B has to be paid

from the date of the award. Considering the statement and objects

and reasons for inserting the said provision and to mitigate the

hardship that would be caused to delay in implementation of the

award, the Apex Court pointed out that it was proposed to provide the

payment of wages last drawn by the workman concerned from the

date of the award till the disputes between the parties are finally

decided either in the High Court or the Supreme Court. It may be noted

that after the award is made by the competent Forum, it becomes the

bounden duty of the employer, either to take back the workman in

service as per the directions made by the labour court/tribunal or to

pay the wages. It is keeping this aspect in mind, Section 17-B, came to

be inserted.

22. Coming back to the case at hand, the counsel for the

applicant respondent relied on decisions of Rajasthan High Court, in

Rajasthan SRTC's case (Supra), Punjab and Haryana High Court

Hans Raj Mahajan & Sons Pvt. Ltd's case (Supra) and this Court

in Pratap Singh's case (Supra) dealing with the issue whether upon

stay by High court of the order of the Ld. Tribunal, relief under S.17-B

ID Act can be granted or not. The applications in the said cases were

allowed for the reason that granting of such prayer of stay against

such order of rejection of approval application amounts to staying

operation of award of reinstatement. In view of that, workmen were

held entitled for the last drawn wages from the date of the order of

rejection application till the matter is finally heard and decided by the

High Court.

23. The said judgments are of no assistance to the applicant

respondent since, in the instant case, the application under Section 17-

B has been filed belatedly after the decision in the writ petition was

made. The Section 17B application is required to be filed by the

workman at the earliest opportune time after having to come to know

the challenge made by the employer against the award directing

reinstatement either in High Court or Supreme court and stay order

granted in such proceedings.

24. The word 'judgment' means declaration or final

determination of rights of the parties in the matter brought before the

Court, while a 'final order' means an order which finally determines the

rights of the parties and brings the case to an end. In the facts of the

present case, the workman has preferred the application under 17-B of

I.D. Act after decision of the writ petition. Indisputably, no proceedings

are pending before this court after the writ petition filed by the

employer was finally decided and therefore, in view of the foregoing

discussion, no relief under S.17-B of the I.D. Act can be granted in the

facts of the instant case. The Apex Court judgment in the case of

Viveka Nand Sethi Vs. Chairman, J & K Bank Ltd. & Ors.(2005) 5

SCC 337, on which reliance was placed by the counsel for non

applicant was not confronted with such an issue and therefore, will be

of no help to determine the instant controversy.

25. In view of the above discussion, there is no merit in the instant

application, therefore, the same is hereby dismissed.

April 19, 2009                              KAILASH GAMBHIR, J