Karnataka High Court
The Management Of vs Shri G Prakashmurthy S/O Gangadarappa on 18 December, 2023
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WP No. 104464 of 2023
IN THE HIGH COURT OF KARNATAKA, DHARWAD BENCH
DATED THIS THE 18TH DAY OF DECEMBER, 2023
BEFORE
THE HON'BLE MR JUSTICE ANANT RAMANATH HEGDE
WRIT PETITION NO. 104464 OF 2023 (S-KSRTC)
BETWEEN:
THE MANAGEMENT OF
NWKRTC DHARWAD DIVISION,
REPRESENTED BY
ITS DIVISIONAL CONTROLLER,
DIVISION DHARWAD,
REPTD. BY ITS CHIEF LAW OFFICER
CENTRAL OFFICE, HUBLI, PIN-580001.
...PETITIONER
(BY SRI. VEENA HEGDE, ADVOCATE)
AND:
SHRI G. PRAKASHMURTHY S/O. GANGADARAPPA
AGED ABOUT 63 YEARS,
OCCUPATION RETD. ARTISAN,
R/O. H. NO.57, PRASANNA COLONY,
BASAVESHWAR NAGAR, GOKUL ROAD,
MOHANKUMAR
B SHELAR HUBBALLI-580001.
...RESPONDENT
Digitally signed by (BY SHRI G. PRAKASHMURTHY S/O. GANGADARAPPA-RESPONDENT)
MOHANKUMAR B
SHELAR
Date: 2023.12.22
12:55:42 +0530 THIS WRIT PETITION IS FILED UNDER ARTICLES 226
AND 227 OF THE CONSTITUTION OF INDIA, PRAYING TO ISSUE
A WRIT, DIRECTION OR ORDER INCLUDING THE WRIT OF
CERTIORARI QUASHING THE AWARD DATED 07/03/2023 PASSED BY
THE PRESIDING OFFICER, LABOUR COURT, HUBLI IN APP-NO.
54/2022 COPY OF WHICH IS PRODUCED AT ANNEXURE-C.
THIS PETITION, COMING ON FOR DICTATING ORDERS, THIS
DAY, THE COURT MADE THE FOLLOWING:
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WP No. 104464 of 2023
ORDER
The petitioner in this petition is questioning the order
passed by the Labour Court, Hubballi, under Section 33-C(2) of
the Industrial Disputes Act, 1947 (hereinafter referred to as
'the I.D.Act, 1947', for short).
2. Admittedly, respondent is the former employee of
the petitioner-Corporation. After attaining the age of
superannuation, the respondent-employee has received the
service benefits payable to him. Respondent approached the
Labour Court under Section 33-C(2) of the I.D.Act, 1947 with a
prayer to award interest on the delayed payment of statutory
benefits.
3. Before the Labour Court, the petitioner-Corporation
appeared and filed objections to the petition filed by the
respondent-employee on the premise that the petition is not
maintainable and the Labour Court has no jurisdiction to grant
the prayer of the employee. Since, the employee claimed
interest from his employer on the delayed payment of service
benefits, the petitioner-corporation disputed the liability to pay
the interest on the delayed payment.
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4. The parties led evidence before the Labour Court
and the Labour Court has allowed the claim petition and
granted interest at the rate of 8% per annum for the delayed
period in making the payment of leave encashment.
5. Aggrieved by the aforementioned order, the
petitioner-Corporation is before this Court.
6. Learned counsel for the petitioner-Corporation
raised the following contentions :
i) The petition under Section 33-C(2) of the I.D. Act,
1947 is in the nature of an execution petition.
Unless the claim is adjudicated or an award is
passed, the Labour Court does not get jurisdiction
to determine the claim.
ii) The claim relating to the entitlement of interest and
the rate of interest is not adjudicated prior to an
application under Section 33-C(2) of the I.D. Act,
1947, as such, the Labour Court does not get the
jurisdiction to entertain a petition.
iii) Under the provisions of the I.D. Act, 1947, there is
no liability imposed on the employer to pay the
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interest in respect of delayed payment of leave
encashment.
iv) The terms of employment between the employer
and employees does not contemplate the payment
of interest to the employees in case of delayed
payment of service benefits, as such, under
Section 33-C(2) of the I.D. Act, 1947, the Labour
Court has no jurisdiction to entertain a claim
petition without there being any adjudication as to
the entitlement of the employee.
7. Learned Counsel Sri G. Prakashmurthy, appearing
for respondent-employee raised the following contentions :
i) The relation between the petitioner and respondent
as an employer and employee is not in dispute.
The date on which the respondent-employee is
entitled to receive the leave encashment benefit is
also fixed in terms of the circular dated
09.07.1998, wherein the employer has an
obligation to make payment of leave encashment
on the date of attaining the age of superannuation.
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This being the position, there is nothing to be
adjudicated by the Industrial Tribunal as
contemplated under the I.D. Act, 1947 and since no
adjudication is required relating to payment of
interest, the proceedings under Section 33-C(2) of
the I.D. Act, 1947 is maintainable.
ii) Assuming that the Labour Court has no jurisdiction
under the scheme of I.D. Act, 1947, to entertain
the matter, in case had it been referred to the
Industrial Tribunal under Section 10 by way of
reference, the same Court is required to adjudicate
the dispute and since the parties have been given
an opportunity to lead evidence, no prejudice is
caused to the petitioner-Corporation, as such, the
petition has to be dismissed.
8. Learned Counsel Sri G. Prakashmurthy, appearing
for respondent-employee would also refer to the Judgments
referred to by the Labour Court in the impugned order.
9. Learned counsel Smt. Veena Hegde, appearing for
the petitioner-Corporation by way of reply would refer to the
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judgment of the Hon'ble Apex Court in the case of Bombay
Chemical Industries vs. Deputy Labour Commissioner and
Another, reported in (2022) 5 SCC 629 and the Judgment of
the co-ordinate Bench of this Court in the case of The
Management of NWKRTC vs. Shri Nijauni S/o. Shivarudrappa
Devanur, Writ Petition No. 103872/2021 (L-KSRTC), disposed
on 05.01.2023.
10. This Court has considered the contentions raised at
the bar.
11. The scope and of ambit of Section 33-C(2) of the
I.D. Act, 1947 is no longer res integra. The various High Courts
as well as the Hon'ble Apex Court have laid down the law
interpreting Section 33-C(2) of the I.D. Act, 1947. It is well
settled proposition of law that the proceedings under Section
33-C(2) of the I.D. Act, 1947 is in the nature of execution
proceedings, where the Labour Court will have the jurisdiction
to enforce the orders pursuant to an adjudication or settlement.
The Labour Court has the jurisdiction to entertain a petition
under Section 33-C(2) of the I.D.Act, 1947.
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12. The judgment of the Hon'ble Apex Court in the case
of Union of India and another vs. Kankuben, reported in
(2006) 9 SCC 292 recognizes distinction 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. The Hon'ble Apex
Court has held that the claim based on the pre-existing right or
benefit can be adjudicated under Section 33-C(2) of the I.D.
Act, 1947 and the claim based on a fair and just claim cannot
be adjudicated under Section 33-C(2) of the I.D. Act, 1947.
13. In the light of the law declared by the Hon'ble Apex
Court, this Court has to consider whether the claim of the
petitioner-Corporation is based on any pre-existing right or
benefit.
14. The right to claim interest can be said to be a pre-
existing right or benefit, provided the terms and conditions of
contract of the employment between the employer and
employee is determined in the contract of employment, or if it
is determined in the Resolutions governing service conditions.
Admittedly, the terms and conditions of contract of employment
between the employer and employee if any, are silent on
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payment of interest on delayed service benefits. The Rules and
Regulations governing the service conditions between the
employer and employee also do not contemplate the payment
of interest in case of delay in paying the interest to the
employee.
15. This being the position, this Court is of the view
that the claim for interest cannot be termed as a claim based
on the pre-existing right or benefit within the meaning of
Section 33-C(2) of the I.D. Act, 1947.
16. It is also an admitted fact that there is no
adjudication by the competent authority or Industrial Tribunal
as to whether the employees are entitled to interest on account
of delayed payment. In addition to that, there is no
adjudication as to the rate of interest as well. The rate of
interest on account of delayed payment depends on various
factors. It is submitted by the learned counsel for the
petitioner-Corporation that payment was delayed on account of
Covid-19 pandemic related restrictions.
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17. Under these circumstances, this Court is of the view
that the Labour Court could not have entertained the petition
under Section 33-C(2) of the I.D. Act, 1947.
18. The Labour Court has referred to the judgment of
the Delhi High Court, wherein the Delhi High Court has taken a
view that the claim relating to leave encashment can be
entertained under Section 33-C(2) of the I.D.Act, 1947, without
there being any reference under Section 10.
19. This Court is of the view that the said decision is
not applicable to the case on hand. The reason is simple. The
Delhi High Court has taken a view in the aforementioned case,
given the fact that the claimants before the Labour Court made
a claim for payment of leave encashment. The fact that the
employees are entitled to leave encashment was not in dispute.
This being the position, the Delhi High Court has taken a view
that the petition under Section 33-C(2) of the I.D. Act, 1947 is
maintainable. However, in the present case, it is to be noticed
that the claim relating to entitlement of interest is in dispute.
Hence, the Judgment referred to by the Labour Court in its
order is distinguishable and not applicable to the case on hand.
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20. For the aforesaid reason, this Court proceeds to
pass the following :
ORDER
(i) The writ petition is allowed.
(ii) The order dated 07.03.2023, passed by the
Presiding Officer, Labour Court, Hubballi, in
App.No.54/2022, at Annexure-C to the writ
petition, is set aside.
(iii) However, this Court is of the view that the
claim of respondent-employee relating to
interest on account of delayed payment of
leave encashment is not adjudicated by this
Court.
(iv) The observations made in this order should
not be construed as an observation denying
the fair claim of the respondent-employee
to claim interest on account of delayed
payment. This Court has only decided the
scope of the Labour Court under Section 33-
C(2) of the I.D. Act, 1947.
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(v) The respondent-employee is entitled to avail
such remedy as available in law to claim
interest on the delayed payment, if it is
advised in law.
(vi) The time spent in prosecuting this petition
before the Labour Court and before this
Court is to be excluded in computing the
limitation, if any, if such claim in made
under other applicable jurisdiction.
Sd/-
JUDGE
gab/ct-bn
