Sylvania & Laxman Employees ... vs Shyama Aggarwal & Others
2011 Latest Caselaw 1856 Del

LETTERS PATENT APPEAL NO. 773/2010                                 Page 1 of 14




*          IN THE HIGH COURT OF DELHI AT NEW DELHI


+             LETTERS PATENT APPEAL NO. 773/2010


                                 Reserved on: 14th January, 2011
%                                Date of Decision: 30th March, 2011


SYLVANIA & LAXMAN EMPLOYEES WELFARE UNION
                                            ....Appellant
              Through Mr. N.S. Dalal & Mr. Devesh Pratap
              Singh, Advocates.


                     VERSUS

SHYAMA AGGARWAL & OTHERS               .....Respondents
           Through Mr. Harish Malhotra, Sr. Advocate
           with Dr. Saif Mahmood, Advocate.


CORAM:
HON'BLE MR. JUSTICE DIPAK MISRA, THE CHIEF JUSTICE
HON'BLE MR. JUSTICE SANJIV KHANNA

1. Whether Reporters of local papers may be allowed to see the judgment?
2. To be referred to the Reporter or not ? Yes.
3. Whether the judgment should be reported in the Digest ? Yes.

SANJIV KHANNA, J.

The appellant, Sylvania and Laxman Employees Welfare

Union, by the present appeal under Chapter X of the Letters

Patent Act has assailed the order dated 3rd March, 2010 passed

by the learned single Judge in Cont. Cas. (C) Nos. 219/2004

and 221/2004 declining and holding that interest @ 12% per

annum is payable only to workers who have submitted their

affidavits prior to 15th April, 1998 but had not been paid their

dues before August, 1999. Learned single Judge has held that

interest is not payable to any other category of workmen in

terms of the order dated 19th August, 2002 as modified by the

order dated 9th September, 2002 in W.P. (C) No. 1624/2001,

Sylvania and Laxman versus Labour Commissioner.

2. At the outset, we may examine the preliminary objection

raised by the respondent that the present appeal is barred and is

hit by Section 19 of the Contempt of Court Act, 1971. It is

submitted that the appellants herein had earlier filed Contempt

Appeal No. 14/2010 but in view of the settled legal position that

an appeal does not lie against an order discharging the

contempt, the appellant withdrew the said appeal seeking liberty

to initiate appropriate proceedings vide order dated 8th

September, 2010. It is submitted that Letters Patent Appeal is

not the appropriate proceedings.

3. The preliminary objection of the respondent does not merit

acceptance in view of the law laid down by the Supreme Court in

the case of Midnapore Peoples' Cooperative Bank Limited

versus Chunilal Nanda, (2006) 5 SCC 399, wherein in

paragraphs 11 and 15, the Supreme Court has opined as

under:-

"11. The position emerging from these decisions, in regard to appeals against orders in contempt proceedings may be summarised thus:

I. An appeal under Section 19 is maintainable only against an order or decision of the High Court passed in exercise of its jurisdiction to punish for contempt, that is, an order imposing punishment for contempt.

II. Neither an order declining to initiate proceedings for contempt, nor an order initiating proceedings for contempt nor an order dropping the proceedings for contempt nor an order acquitting or exonerating the contemnor, is appealable under Section 19 of the CC Act. In special circumstances, they may be open to challenge under Article 136 of the Constitution.

III. In a proceeding for contempt, the High Court can decide whether any contempt of court has been committed, and if so, what should be the punishment and matters incidental thereto. In such a proceeding, it is not appropriate to adjudicate or decide any issue relating to the merits of the dispute between the parties.

IV. Any direction issued or decision made by the High Court on the merits of a dispute between the parties, will not be in the exercise of "jurisdiction to punish for contempt" and, therefore, not appealable under Section 19 of the CC Act. The only exception is where such direction or decision is incidental to or inextricably connected with the order punishing for contempt, in which event the appeal under Section 19 of the Act, can also encompass the incidental or inextricably connected directions. V. If the High Court, for whatsoever reason, decides an issue or makes any direction, relating to the merits of the dispute between the parties, in a contempt proceedings, the aggrieved person is not without remedy. Such an order is open to challenge in an intra- court appeal (if the order was of a learned Single Judge and there is a provision for an intra-court appeal), or by seeking special leave to appeal under Article 136 of the Constitution of India (in other cases).

The first point is answered accordingly.

XXXX

15. Interim orders/interlocutory orders passed during the pendency of a case, fall under one or the other of the following categories:

(i) Orders which finally decide a question or issue in controversy in the main case.

(ii) Orders which finally decide an issue which materially and directly affects the final decision in the main case.

(iii) Orders which finally decide a collateral issue or question which is not the subject-matter of the main case.

(iv) Routine orders which are passed to facilitate the progress of the case till its culmination in the final judgment.

(v) Orders which may cause some inconvenience or some prejudice to a party, but which do not finally determine the rights and obligations of the parties."

4. The aforesaid judgment was referred to in Tamilnad

Mercantile Bank Shareholders Welfare Association (2)

versus S.C. Sekar and Others, (2009) 2 SCC 784 and it was

observed as under:-

"45. Assuming that an appeal under Section 19 was technically not maintainable, having regard to the fact that the interim injunction was granted till disposal of the contempt application, in our opinion, it was a judgment within the meaning of Clause 15 of the Letters Patent of the Madras High Court.

5. As the facts delineated below would exposit, the present

case falls under the exceptions carved out by the Supreme

Court in the case of Midnapore Peoples' Cooperative Bank

Limited and Tamilnad Mercantile Bank Shareholders

Welfare Association (2) (supra) as the impugned order finally

decides an issue or makes an adjudication relating to the merits

of the dispute between the parties.

6. The appellant is a registered trade union and had

submitted an application for issuance of recovery certificate and

payment of wages, which was allowed by the Labour

Commissioner against the respondent company. Action of the

Labour Commissioner was made subject matter of challenge by

the respondent in W.P. (C) No. 3375/1996. During the pendency

of the writ petition, the management entered into an agreement

with one of the trade unions on 16th August, 1997, but this was

not accepted by the majority of the workers. Thereafter, another

settlement dated 28th August, 1999 which was more favourable

with the workers was executed. As the workers had not been

paid, the Writ Court intervened and efforts were made to settle

the matter as it was noticed that the pending litigation was

causing prejudice to all parties. Order dated 19th August, 2002

records that broad parameters of a settlement were worked out

with some modification. The said order has a chart, the relevant

portion of which reads as under:-

"

S. No.           Topic       Settlement Settlement Desired
                             as per law 16.08.1997
                                        and
                                        26.08.1999
1-9                X              X           X            X
10.        Interest       on     No     Interest to As       per
           dues               provision be      paid 1997
                                        upto         settlement.
                                        31/Aug/99
                                        to workers
                                        who have
                                        submitted
                                        their
                                        affidavit
                                        prior     to
                                        15/Mar/98.
                                        No interest
                                        after
                                        31/Aug/99
11-13      X                      X           X            X

                                                                       "

7. Thereafter, the order records as under:-

"The interest on dues shall be at the rate of 12% p.a. as per 1997 settlement and as per modification of settlement subsequently entered into by the management as well as the welfare union. The interest shall be paid upto 31.08.1999 to the workers who have submitted their affidavits prior to 15.03.1998.

CWP No. 6755/2001 is a writ petition which, according to the Petitioner is represented by a separate union which is representing about 200 those workers who have not filed their affidavits in terms of the 1997 settlement or 1999 settlement. They shall file their affidavits before the management and they shall also be paid interest on the same rate as has been given to other workers who have earlier filed their affidavits. The interest payable under the settlement and modified settlement is from 16.12.1997 to 31.08.1999."

(emphasis supplied)

8. The next material order is dated 9th September, 2002. The

Court referred to the earlier order dated 19th August, 2002 and

had stated that this order was in continuation of the earlier order.

The order records that management has filed an affidavit-cum-

undertaking and states that one Mr. Ashok Aggarwal would be

bound by the said undertaking. It records that paragraph 7 of the

affidavit would not come in the way and be a ground not to make

payment. The order further states that the undertaking filed by

Mr. Suresh Shukla, General Secretary, Sylvania and Laxman

Employees Welfare Union, i.e., the present appellant, was

accepted by the Court. In the operative portion of the order, it is

recorded as under:-

" The District Collector is directed to immediately remove the seal of the premises and hand-over the property to the management forthwith.

This order in no way deals with the strength of the unions. It will be open for the workers unions to move appropriate machinery under the industrial law or appropriate forum for getting their disputes, in relation to their recognition or strength, if any, redressed.

The workers who have got their benefits under the settlements, shall not be entitled to get benefit under the modified settlement, as agreed before this Court.

All the worker unions undertake to withdraw all the cases/proceedings pending in court/tribunals against the company.

In CWP No. 1624/2001 certain interim orders have been passed and pursuant to that a sum of Rs.47 lakhs was deposited by the management in this Court. Counsel for 37 workers have not been paid salary from April, 1995 till 31st March, 1996. The management shall make payment of the salary due to said 37 lakhs which has been deposited by the management in this Court.

All the parties shall be bound by the undertaking given to the Court in view of the matter having been settled amicably between the parties. In terms

of the undertakings filed by the respective parties, all the interim orders in CWP No. 6755/2001, CWP No. 3375/96 and CWP No. 1624/2001 stand vacated. All the pending applications stand disposed of in terms of settlement arrived between the parties."

9. A perusal of the aforesaid orders exposits that various

aspects including monthly wages, bonus, gratuity,

compensation, notice pay etc., were discussed and examined

and were part of the broad parameters of settlement worked out

as recorded in the order dated 19th August, 2002. As the

workers had not been paid, question of interest on dues was

also relevant. Under the heading „settlement as per law‟, it was

recorded that there was no provision for payment of interest but

under the heading „settlement 16th August, 1997 and 26th

August, 1999‟ it was recorded that interest would be paid upto

31st August, 1999 to workers who had submitted their affidavits

prior to 15th March, 1998 but no interest would be payable after

31st August, 1999. Under the heading „desired‟ it was recorded

that interest would be as per 1997 settlement. This obviously

means that the parties felt and had agreed that interest should

be paid in terms of 1997 settlement, i.e., @ 12% per annum upto

31st August, 1999. As per the appellant, interest is payable to all

employees whether or not they had furnished their affidavits

prior to 15th March, 1998 but as per the respondent, interest is

payable to workers who had submitted affidavits upto 15th

March, 1998. This is a disputed question but it finds answer in

the subsequent underlined portion of the order dated 19th

August, 2002, which is quoted above. The said paragraph

clearly states that interest on dues @ 12% per annum as per

1997 settlement and as per the modified settlement shall be paid

by the management to the 200 workers of the appellant union.

The last sentence in the first paragraph quoted above is merely

explanatory or clarificatory in nature and states that even as per

the 1997 settlement, workers who had submitted affidavits prior

to 15th March, 1998 would be paid interest. Even if there was

any doubt or ambiguity, the said gets clarified in the second

paragraph quoted above. The said paragraph relates to the

workers union i.e. the present appellant, who had filed Writ

Petition (Civil) No. 6755/2001, but had not submitted affidavits in

terms of 1997 settlement or 1999 settlement. They too were

given right to file affidavits with the management and accordingly

would be paid interest at the same rate as was given to other

workers who had filed affidavits. Accordingly, the last sentence

in second paragraph records interest was payable under the

settlement and modified settlement from 16th December, 1997 to

31st August, 1999. The words "The interest payable under the

settlement and modified settlement is from 16th December, 1997

to 31st August, 1997", are clearly illustrative of the intention to

give benefit to the workers of the appellant union. Obviously, the

Court did not want to create any artificial discrimination and

distinction between the workers who had entered into a

settlement earlier in 1997/1999 and those who had entered into

the settlement later as a result of efforts of the Court. The two

paragraphs have to be read together to find out the intention and

purport behind the wordings. In case, interest was not to be paid

to the workers who had not filed affidavits till 15th March, 1998,

there was no need to make the aforesaid observations.

10. As noted above, the last sentence in the first paragraph

quoted above is only to elucidate the existing position and not to

deny benefit of interest to workers who had not submitted

affidavits prior to 15th March, 1998. The said sentence cannot be

read in isolation as to negate the right of the workers to get

benefit under the modified settlement agreed before the Court,

terms of which as were understood clearly mean that interest

would be paid from 16th December, 1997 to 31st August, 1999 to

the workers irrespective of whether they had filed their affidavits

prior to 15th March, 1998.

11. Another contention raised by the appellant is regarding the

delay in payment, which was to be made within eighteen months

from the date of settlement. It is alleged that the payment has

not been made in terms of the settlement. This aspect has not

been adverted to and does not appear to be a subject matter of

the contempt proceedings and rightly so, as it is a disputed and

debatable/factual issue. Allegations and counter allegations

have been made as to who is responsible and liable for the

delay in making payment in terms of the settlement. It also

appears that Writ Petition (Civil) No. 9488-89/2004 was filed

before this Court and certain orders have been passed, copy of

which have not been placed on record. We are not examining

the said issue and question and the same is left open. It is open

to the parties to take appropriate proceedings or steps in

accordance with law on the said aspect.

12. The appeal is accordingly allowed to the extent indicated

above. However, in the facts of the case, there will be no order

as to costs.

(SANJIV KHANNA) JUDGE

( DIPAK MISRA ) CHIEF JUSTICE

MARCH 30th, 2011 VKR