Management Of Centaur Hotel vs P.S. Mohan Nair & Anr.
2011 Latest Caselaw 2132 Del

            *IN THE HIGH COURT OF DELHI AT NEW DELHI

                                               Date of decision: 21st April, 2011

+                            CM No.4440/2011 in W.P.(C) No.115/1999

         MANAGEMENT OF CENTAUR HOTEL           ..... Petitioner
                    Through: Ms. Padma Priya, Advocate

                                         Versus

    P.S. MOHAN NAIR & ANR.                ..... Respondents
                 Through: Mr. Atul T.N., Advocate
CORAM :-
HON'BLE MR. JUSTICE RAJIV SAHAI ENDLAW
1.       Whether reporters of Local papers may
         be allowed to see the judgment?                       Yes

2.       To be referred to the reporter or not?                Yes

3.       Whether the judgment should be reported               Yes
         in the Digest?

RAJIV SAHAI ENDLAW, J.

1. The petitioner seeks clarification of the earlier order under Section

17B of the Industrial Disputes Act, 1947 for the reason that the respondent

employee is due for superannuation. It is contended that the petitioner,

after the date of superannuation of the respondent employee, is not liable

for 17B wages.

2. The application came up first on 28th March, 2011, when it was

enquired from the counsel for the petitioner as to why the order under

Section 17B of the I.D. Act, which is in the nature of subsistence

allowance should be linked till the date of retirement / superannuation only

in as much as it was felt by this Court that if the employee has not had the

benefit of reinstatement and of retiral benefits owing to the pendency of

the writ petition impugning the award, the employee would remain entitled

to 17B wages till the disposal of the petition. The counsel for the

petitioner had then sought time to address on the said issue.

3. The counsel for the petitioner has today at the outset contended that

the question is no longer res integra. Attention is invited to State Bank of

India Vs. G.D. Sharma 2007 III AD (Delhi) 70 where a Single Judge of

this Court while allowing the writ petition of the employer against the

award of the Industrial Adjudicator also observed that the respondent

workman in that case had during the pendency of that writ petition played

smart; inspite of having superannuated, he moved an application under

Section 17B and obtained order thereon and which order was subsequently

suspended since the workman "was not entitled to any wages under

Section 17B after superannuation".

4. A perusal of the judgment aforesaid shows that the same does not

contain any discussion or reasoning on why, the workman after

superannuation is not entitled to wages under Section 17B of the I.D. Act.

The said judgment can thus not be stated to be a precedent on the said

aspect.

5. The counsel for the petitioner also contends that the High Court of

Bombay and the High Court of Calcutta have also held that the workman is

entitled to 17B wages only till the date of superannuation and not

thereafter.

6. A Single Judge of the Bombay High Court in Hind Rectifiers Ltd.

Vs. Presiding Officer, Ist Labour Court, Bombay MANU/MH/0007/2001

held that, it is difficult to imagine the situation where an employee who has

superannuated would also be entitled to receive 17B wages even beyond

the period of superannuation; the intention of the statute in incorporating

the provisions of Section 17B was that the employee should not suffer any

hardship where the employer has taken recourse to file proceedings in the

High Court or the Supreme Court and obtained the stay of the award of

reinstatement passed in the employee‟s favour; that the basic right of the

employee is to continue in service till the age of superannuation only and

not beyond that; that even if under the order passed by the Industrial

Adjudicator for reinstatement, the employee had been reinstated, the

employee would have been entitled to continue in service only up to the

age of superannuation and not beyond that; that the provisions of Section

17B are subject to conditions of employment and do not cross the limit laid

down in the conditions of service; the employee cannot claim anything

which he cannot get under the terms of employment and thus the right of

the employee under Section 17B is subject to the basic which the employee

enjoys under the conditions of service i.e. till the age of superannuation.

The Bombay High Court supported the said logic further with the

reasoning that since under Section 17B the employee is entitled to receive

his full wages last drawn by him; that means he is entitled to "wages" and

nothing more and to which wages he is entitled only till the age of

superannuation.

7. The Single Judge of the High Court of Calcutta in Hooghly Printing

Co. Ltd. Vs. State of West Bengal (2004) III LLJ 499 (Cal) also held that

the date of ending of the relief under Section 17B must be the date of

retirement or the date of disposal of writ petition whichever is earlier in as

much as after retirement there does not exist any employer-employee

relation and the employee also does not remain a workman under the

employer.

8. Per contra, the counsel for the respondent employee who also

appears today has invited attention to the judgment of another Single Judge

of the Calcutta High Court in Bharat Petroleum Corporation Ltd. Vs.

Union of India 1998 (2) LLN 228 negativing the contention that Section

17B has no application in respect of workmen who have crossed their date

of retirement. It was held that to hold so would amount to rewriting the

provisions of Section 17B and that the language of Section 17B was clear

and unambiguous and where the three ingredients of (i) existence of an

award of the Industrial Adjudicator directing reinstatement of the workman

(ii) the employer having preferred any proceedings against such award in

the High Court or the Supreme Court (iii) the workman having not been

employed in any establishment, are fulfilled, the Court is under obligation

to pass an order in terms of Section 17B and cannot go into the question

whether the workman has in the meantime crossed the date of retirement.

9. The counsel for the respondent employee relying upon Bharat

Singh Vs. Management of New Delhi Tuberculosis Centre (1986) II LLJ

217 (SC) also contends that even prior to the enactment of Section 17B,

Courts in their discretion were awarding wages to workmen when they felt

such a direction was necessary. It is thus contended that payment under

Section 17B is not relatable to superannuation.

10. I may mention that the judgments of the Bombay and the Calcutta

High Courts relied upon by the counsel for the petitioner also refer to the

judgment of the Madras High Court in Varadraja Textiles (P) Ltd.,

Coimbatore Vs. Labour Court, Coimbatore 1999 (1) CLR 631 holding

that the moment the workman reaches the age of superannuation, his right

to get wages is lost and his right is only to get back wages as per the award

which is impugned in the writ petition. It was also observed that when stay

is granted in respect of the award relating to back wages, one has to

consider whether such stay is warranted on the merits of that case; the

practice prevailing in that Court of normally directing payment of 30% and

releasing part of that to the workman was noticed.

11. As far as the judgment in Bharat Petroleum Corporation Ltd.

(supra) cited by the counsel for the respondent employee is concerned, I

find that the Division Bench of Calcutta High Court in Bharat Petroleum

Corporation Ltd. Vs. Prabir Kumar Mukherjee 2001 (2) CHN 79 set

aside the judgment of the Single Judge, holding that since, even if the

award of the Industrial Adjudicator is sustained, the relationship of

employer-employee would cease on attaining the age of superannuation,

Section 17B cannot be allowed to enable a retired employee to get the

benefit thereunder simply because a proceeding is pending before the

Court of Law.

12. Section 17B was enacted to offset the delays caused in

implementation of an award of reinstatement owing to pendency of

proceedings in the High Court or the Supreme Court. Significantly, no

such benefit is granted to the workman/employee till the proceedings are

pending before the Industrial Adjudicator and till an award of

reinstatement is made. The legislature has not provided for any appeal or

other remedy against such an award. However, the remedy of judicial

review under the Constitution could not be denied to the employer

aggrieved from the award. Had the award been permitted to be

implemented, the employee thereunder would have been reinstated and

would have started earning wages as being earned by his contemporaries

and would also have, on reaching the age of superannuation earned the

retiral benefits. However, owing to the pendency of the proceedings

against the award in the High Court or the Supreme Court, the employee is

deprived of the benefits aforesaid of reinstatement. I am unable to see any

difference in the needs of such a workman/employee (which were sought

to be redressed by Section 17B) before or after his attaining the age of

superannuation.

13. The law has to be interpreted to remedy the malady for which it was

enacted and has to be in consonance with the prevailing situation. The

proceedings before the Industrial Adjudicator intended to be summary in

nature, experience has shown, are no better than in the infamous Civil

Court. They remain pending for years, at times, for tens of years. Often, the

workman/employee attains the age of superannuation before the

culmination of proceedings before the Industrial Adjudicator or shortly

thereafter. Even in the event of the workman/employee so superannuating,

the Industrial Adjudicator is entitled to grant notional reinstatement to

enable payment of all retiral benefits. Upon pendency of proceedings

against such award in the High Court or the Supreme Court, such payment

is held up. Law cannot be divorced from reality and has to evolve with the

times. Thus the question aforesaid has to be decided to provide an answer

to the situation so prevailing and not by shutting one‟s eyes thereto.

14. Recent trend in the awards of the Industrial Adjudicator is of

granting compensation in lieu of reinstatement. However, payment of such

compensation also is held up owing to the challenge to the award in the

High Court. The question which arises in such cases also is, when

compensation is in lieu of reinstatement, why should the benefit of Section

17B attached to an award directing reinstatement, should not attach to an

award for compensation in lieu of reinstatement. Unless the same is done,

compensation can never truly be in lieu of reinstatement.

15. The legislature while drafting Section 17 B has been careful to use

the language of widest amplitude. When the legislature has used the

expression "during the pendency of such proceedings in the High Court or

the Supreme Court", the amplitude thereof cannot be curtailed by limiting

the payment thereunder only till the attainment of the age of

superannuation even though the proceedings may remain pending.

16. I am, with respect, unable to agree with the reasoning of the High

Courts of Calcutta, Madras and Bombay. The question of employer-

employee relationship in my view, is irrelevant. According to the employer

the said relationship stood terminated even before the workman approaches

the Industrial Adjudicator. Even though the Industrial Adjudicator by

making the award sets aside the said action of the employer, during

pendency of the proceedings before the High Court there is generally a stay

of the said order. Thus, the payment under Section 17B cannot be said to

be dependent on the existence of such relationship and has been made

dependent only on the existence of the ingredients of Section 17B and

which as aforesaid are pendency of the proceedings in the High Court.

17. There is inherent danger in confining the applicability of Section

17B till the age of superannuation of workman / employee. If payment

under Section 17B is limited as aforesaid, it would give impetus to

unscrupulous employers to delay proceedings before the Industrial

Adjudicator knowing that the challenge to the award even if any against

them, before the High Court would be free of burden of Section 17B.

18. The Apex Court in Dena Bank v. Kiritikumar T. Patel (1999) 2

SCC 106 noticed that the object underlying the enactment of Section 17B

is to give relief to the workman in whose favour an award of reinstatement

has been passed by the Labour Court and the said award is under challenge

in the High Court or the Supreme Court; the said relief has been given with

a view to relieve the hardship that would be caused to a workman on

account of delay in implementation of the award as a result of the

pendency of the proceedings in the High Court or the Supreme Court. It

was further held that the payment which is required to be made by the

employer to the workman is in the nature of subsistence allowance not

refundable or recoverable from the workman even if the award is set aside.

It was also held that Section 17B does not in any way preclude the High

Court or the Supreme Court to pass an order directing payment of a higher

amount to the workman if such higher amount is considered necessary in

the interest of justice and that such a direction would be de hors the

provisions contained in Section 17B and while giving the direction, the

Court may also give directions regarding refund or recovery of the excess

amount in the event of the award being set aside. It was however held that

such discretion of the High Court does not extend to denying the benefit of

Section 17B.

19. As noticed in Bharat Singh (supra), Section 17B was added to the

ID Act only w.e.f. 21 st August, 1984; even prior thereto High Courts while

staying enforcement/implementation of the awards of the Industrial

Adjudicators were imposing conditions including of interim payments to

the workman; such payments would extend till the pendency of the writ

petition and not till the date of superannuation only. The same was

obviously not deemed sufficient by the legislature and it was deemed

expedient to make the employer, desirous of challenging such awards,

necessarily liable for payments as provided and to that extent the discretion

of the High Court was taken away - a special right was created in favour of

such workmen. In my view, in the absence of the legislature having

restricted the said right till the age of superannuation, it is not open to the

Courts to interfere therewith.

20. I am also unable to accept that because of the use of the word

"wages" in Section 17B, the right thereunder is available only till the

workman would have earned such wages i.e. till his superannuation. The

said reasoning is contrary to the payment under Section 17B having been

held to be in the nature of subsistence allowance. The word "wages" has

not been used to denote that the workman is entitled to the payment under

Section 17B only as long as he is entitled, under his term of employment,

to the wages. Even though the provision uses the expression "full wages

last drawn" but this Court (see DDA v. Omvanti 2003 VI AD (Delhi) 205

(DB)) has interpreted the same to be meaning „minimum wages‟, thereby

watering down the words "last drawn" in the said provision.

21. The same leads me to hold that the word "wages" has been used in

Section 17B only as a measure of the amount to which the workman is

entitled thereunder and not to restrict the benefit otherwise widely

conferred by the Legislature without any restrictions whatsoever, till the

age of superannuation only.

22. If the payment under Section 17B is in the nature of subsistence

allowance then I fail to see as to how the same can be denied to a retired /

superannuated employee, petition challenging the award of Industrial

Adjudicator in whose favour continues pending even beyond the date of

his superannuation. It cannot be said that the employee / workman upon

superannuation is not required to or loses his right to subsist. The award of

the Industrial Adjudicator directing reinstatement of the workman, if

implemented, would have resulted in employee / workman earning not

only the last drawn wages inclusive of maintenance allowance but

something much more i.e. the emoluments which the persons of his

experience and skill may then be earning. Generally an award directing

reinstatement is also accompanied with an award for back wages, whether

to full extent or partially. The practice prevalent, at least, in this Court of

granting stay of implementation of the award, even if it on the condition of

deposit of the amount then due under the award in the Court, also has to be

noticed. There are inherent difficulties in during the pendency of the writ

petition, releasing any part of the award amount to the workman.

Restitution in the event of the writ petition succeeding in such cases is not

practical. The workman / employee generally has no assets from which

restitution can be effected. Else, the workman / employee cannot run his

kitchen from the security deposited by the employer in the Court.

23. There is yet another aspect of the matter. Had the employee in

terms of the award been reinstated, upon attaining the age of

superannuation, he would have become entitled to and received his retiral

benefits. However, he is deprived of the same also owing to the pendency

of the petition challenging the award in the Court. I fail to see as to how in

the aforesaid circumstances, an employee, who has superannuated and

who, owing to the award being challenged in the Court has been deprived

of the benefits thereof, be held to be also not entitled to the benefits of

Section 17B of the Act.

24. I am also of the view that reading Section 17B in the aforesaid

manner would not cause any prejudice to the employer. The Supreme

Court in Dena Bank v. Ghanshyam (2001) 5 SCC 169 has already held

that while the payment under Section 17B to the extent of the rate of wages

last drawn is non refundable irrespective of the outcome of the writ

petition, the amount if any received over and above the same can be

refundable. The same can also be extended to the payment under Section

17B post the date of superannuation. The Court can always at the time of

final decision allow adjustment of the payments if any received post the

date of superannuation, out of the amounts due under the award.

25. I am therefore of the opinion that payments under Section 17B are

not limited in time till the date of superannuation, if the writ petition

challenging the award of reinstatement remains pending beyond the date of

superannuation also. As aforesaid, payment beyond the date of

superannuation can be ordered at the same rates as under Section 17B, in

exercise of powers under Article 226 of the Constitution also and as a

condition for stay of implementation of the award.

26. The application of the petitioner seeking clarification / modification

of the order under Section 17B is thus dismissed. No reply to the

application having been called for and notice of the application having also

not been issued, no order as to costs.

RAJIV SAHAI ENDLAW (JUDGE) APRIL 21, 2011 „gsr‟ (corrected & released on 1st June, 2011)