Madras High Court
The Management Of Coimbatore ... vs The Presiding Officer on 24 June, 2021
W.A.No.1727 of 2011
IN THE HIGH COURT OF JUDICIATURE AT MADRAS
DATED : 24.06.2021
CORAM :
THE HONOURABLE MR.JUSTICE T.RAJA
and
THE HONOURABLE MR.JUSTICE V.SIVAGNANAM
W.A.No.1727 of 2011 and
M.P. No.1 of 2011
The Management of Coimbatore District,
Central Co-operative Bank Ltd.,
rep. by its Special Officer,
Coimbatore. ... Appellant
versus
1.The Presiding Officer,
Labour Court,
Coimbatore.
2.P.Muthusamy
3.S.K.Rajagopal
4.K.Ravi
5.P.Subbarayan
6.K.Govindasamy
7.P.S.Dhandapani
8.K.Krishnan
9.V.Balasundaram
10.T.K.Venkatesan
11.K.Govindasamy
12.T.K.Venkatesan
13.A.Jothinathan
14.K.Shanmugam
15.S.Padmanabhan
16.M.Ayyasamy
17.S.Shanmugam
18.S.Thiagarajan ... Respondents
1/16
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W.A.No.1727 of 2011
Prayer: Appeal filed under Clause 15 of Letters Patent against the
order dated 08.07.2011 in W.P. No.9972 of 2007 by the Hon'ble
Mr.Justice K.Chandru.
For Appellant : Mr.S.Saravanan
For Respondents : Mr.V.Ajoykhose for
RR2 to 12 and RR14 to 18
R1-Court
R13-No appearance
JUDGMENT
(Judgment of this Court was delivered by T.RAJA,J.)
This writ appeal has been directed against the impugned order
dated 08.07.2011 passed by the learned Single Judge in W.P.
No.9972 of 2007.
2.Mr.S.Saravanan, learned counsel appearing for the
appellant, assailing the correctness of the impugned order, argued
that while entertaining the claim made by the contesting
respondents in Computation Petitions in C.P. Nos.1109 of 2002 etc.,
filed under Section 33-C(2) of the Industrial Disputes Act, 1947 (in
short 'the Act'), the Labour Court has computed various amounts
due to the contesting respondents in terms of the encashment of
privileged leave salary and partly allowed the petitions. Aggrieved
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W.A.No.1727 of 2011
by the same, the above writ petition has been filed by the appellant
Management. But, the learned Single Judge has failed to consider
the fact that respondents 2 to 18 were not entitled to any benefit
under Clause 8(1)(c) of the by-law as to the un-earned leave
wages. Moreover, respondents 2 to 18 were not even entitled to the
encashment of earned leave as claimed in the Computation Petitions
because there is no pre-existing right available to them as the by-
law of the Society was subsequently amended. Admittedly, when
the amendment of the by-law of the Society was questioned that
was also pending, it goes without saying that the pre-existing right
was no longer available to them as per Clause 8(1)(c) of the by-law
of the Society. Since a Settlement has been reached between the
parties under Section 12(3) of the Act the moment Clause 8(1)(c) of
the by-law of the Society was amended removing from the by-law,
there is no need to amend the Settlement because the settlement
also becomes infructuous. This vital aspect has been overlooked by
the Labour Court. When the order of the Labour Court was being on
the ground that the Resolution passed in the General Body is not
implementable for the reason that there is an order of status quo in
I.A. No.907 of 2002 in O.S. No.880 of 2002, the same is not
sustainable in law. When this crucial aspect was questioned before
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W.A.No.1727 of 2011
this Court in the above writ petition, the learned Single Judge has
not considered the entire issue and decided the same on the point
that it is immaterial that the by-law which were sought to be framed
by the Board with effect from 01.07.1996 came to be cancelled by
them subsequently in the absence of approval. Though the learned
Single Judge has accepted the case of the appellant that
respondents 2 to 18 were not workmen, the learned Single Judge
has come to the conclusion that the appellant Bank cannot
discriminate between the contesting respondents and the workmen
within the meaning of Section 2(s) of the Act. Moreover, when they
are all Managers and Assistant Managers and their monthly
remuneration are more than Rs.10,000/-, they are not at all
workmen and therefore, they are not entitled to lay their claim
before the Labour Court invoking Section 33-C(2) of the Act. Finally,
when the unearned leave benefits conferred on respondents 2 to 18
under Clause 8(1)(c) of the by-law was amended, the learned
Single Judge ought to have allowed the writ petition because on the
date of adjudication made on the petitions filed under Section 33-
C(2) of the Act, there was no pre-existing right available to the
contesting respondents for the simple reason that Clause 8(1)(c) of
the by-law was removed. Since this aspect has also been
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W.A.No.1727 of 2011
overlooked by the learned Single Judge and the Labour court, this
appeal deserves to be allowed by setting aside the impugned order.
3.Mr.V.Ajoykhose, learned counsel for respondents 2 to 12
and 14 to 18 urging this Court to dismiss this appeal, submitted that
the arguments advanced by the learned counsel for the appellant
that respondents 2 to 18 were not workmen, since Clause 8(1)(c) of
the by-law was amended by removing the un-earned leave wages
and the pre-existing right have been taken away and therefore, the
Computation Petitions should have been rejected, are un-justified
for the reason that the benefits sought from the Labour Court under
Section 33(c)(2) is independent and is nothing to do with Clause
8(1)((c) of the by-law of the Society. Therefore, whether Clause
8(1)(c) of the by-law of the Society is existing or taken away,
respondents 2 to 18 are entitled to approach the Labour Court by
laying their claim under Section 33(c)(2) of the Act for the clear
reason that their rights are regulated by the Settlement reached
between the parties under Section 12(3) of the Act.
4.In support of his submission, taking reliance from the
judgment in the case of Karnataka State Road Transport
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W.A.No.1727 of 2011
Corporation vs. KSRTC Staff and Workers' Federation and another
reported in 1999 (2) SCC 687 dealing with the binding effect of the
Settlement reached between the employer and workman, learned
counsel for respondents 2 to 12 & 14 to 18 submitted that the
binding effect of the settlement will continue between the parties on
the basis of the earlier settlement reached between the parties till
the new settlement is reached. In the present case, when there was
a 12(3) Settlement reached between the parties on 30.03.1979 and
the same has not been replaced by any new Settlement, the binding
effect of the settlement will continue between the parties. This legal
fact has been considered by the Apex Court in the case of LIC of
India vs. D.J.Bahadur reported in 1981 (1) SCC 315 holding that till
any new Settlement on the question of grant of the payroll check-off
facility was substituted by the parties, the legally binding effects of
the earlier settlement of 1988 would continue to operate and the
Corporation will then be contractually bound to confer the payroll
check-off facility on the Union.
5.Again taking support from the judgment of our High Court in
the case of Tamil Nadu Cements Corporation Ltd. and another vs.
N.Pandurangan and others reported in 2005 (1) LLN 964 holding
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W.A.No.1727 of 2011
that the Management cannot deviate from the bilateral settlement
by the unilateral circular, submitted that having entered into the
12(3) Settlement dated 30.03.1979, granting un-earned leave to
the employees and the same having been approved in G.O. No.488
Finance (Pension) Department dated 12.08.1996 stating at the time
of retirement, 50% of the leave of private affairs standing to the
credit of the employees upto maximum of 90 days, be entitled to
full leave salary, the appellant, cannot act on their own whims and
fancies, which would be detrimental to the interest of the contesting
respondents.
6.We find merits on the submission made by the learned
counsel appearing for respondents 2 to 12 and 14 to 18. When
there is a memorandum of settlement reached between the
appellant and respondents 2 to 18 granting unearned leave to
employees and the same has been approved in the G.O. No.488
Finance (Pension) Department dated 12.08.1996 stating at the time
of retirement, 50% of the leave of private affairs standing to the
credit of the employees upto maximum of 90 days, be entitled to
full leave salary, it is not open to the appellant to canvass either
before the Labour Court or before us that there was no pre-existing
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W.A.No.1727 of 2011
right available to respondents 2 to 18 to lay their claim under
Section 33(c)(2) of the Act. To throw more light on the appellant, it
is relevant to refer to Section 33-C(2) as under:
'(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:]'
7.A mere perusal of the above provision shows that 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.
8.In the case on hand, when the settlement has been reached
on 30.03.1979 and the State Government has issued the said G.O.
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W.A.No.1727 of 2011
No.488 Finance (Pension) Department dated 12.08.1996, granting
50% of the leave of private affairs standing to the credit of the
employees upto maximum of 90 days, at the time of retirement, we
are able to see that there is a pre-exisiting right available to
respondents 2 to 18. Therefore, they are entitled to approach the
Labour Court under Section 33(c)(2) of the Act.
9.Since the terms and conditions mentioned in the
Memorandum of Settlement reached under Section 12(3) of the Act
on 30.03.1979 makes the legal position clear granting un-earned
leave to employees and the rights conferred in clause 8(1)(c) of the
Special by-law making it clear that every employee of the Bank shall
be entitled to un-earned leave on private affairs for six months on
half pay and allowances and the said G.O. providing 50% of leave
on private affairs standing to the credit upto the maximum of 90
days at the time of retirement, it is not known as to how the
appellant can raise an issue that Computation Petitions filed by the
contesting respondents, based on the Settlement dated 30.03.1979
reached under Section 12(3) of the Act, cannot be taken upon for
consideration though the amendment was made only on 02.08.2011
to remove the said benefit.
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W.A.No.1727 of 2011
10.In this regard, it is relevant to extract the judgment of the
Apex Court in the case of Karnataka State Road Transport
Corporation vs. KSRTC Staff and Workers' Federation and another
reported in 1999 (2) SCC 687 as under:
'19.But even on an assumption that the aforesaid
notification satisfied the requirements of section 19
Section 19 sub-section (2) for terminating the
settlement dated 28-7-1988, even then till a new
settlement laying down fresh terms of settlement on the
question of the payroll check-off facility saw the light of
day, the binding effect of the 1988 settlement has to
continue to bind the parties by way of contractual
obligations. This aspect is well-settled by a three-judge
Bench decision of this court in LIC of India v.
D.J.Bahadur where Krishna Iyer,J., speaking for the
Supreme Court at SCR p.1114 of the Report, has made
the following pertinent observations:(SCC pp.340-41,
para 34)
''34. The core question that first falls for
consideration is as to whether the settlements of 1974
are still in force. There are three stages or phases with
different legal effects in the life of an award or
settlement. There is specific period contractually or
statutorily fixed as the period of operation. Thereafter,
the award or settlement does not become non est but
continues to be binding. This is the second chapter of
legal efficacy but qualitatively different as we will
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W.A.No.1727 of 2011
presently show. then comes the last phase. If notice of
intention to terminate is given under Section 19(2) of
19(6) then the third stage opens where the award or
the settlement does survive and is in force between the
parties as a contract which has superseded the earlier
contract and subsists until a new award or negotiated
settlement takes its place. Like nature, law abhors a
vacuum and even on the notice of termination under
Section 19(2) or (6) the sequence and consequence
cannot be just void but a continuance of the earlier
terms, but with liberty to both sides to raise disputes,
negotiate settlements or seek a reference and award.
Until such a new contract or award replaces the
previous one, the former settlement or award will
regulate the relations between the parties. Such is the
understanding of industrial law at least for 30 years as
precedents of the High Courts and of this Court bear
testimony. To hold to the contrary is to invite industrial
chaos by an interpretation of the ID Act whose primary
purpose is to obviate such a situation and to provide for
industrial peace. To distil from the provisions of Section
19 a conclusion diametrically opposite of the objective,
intendment and effect of the section is an interpretative
stultification of the statutory ethos and purpose.
Industrial law frowns upon a lawless void and under
general law the contract of service created by an award
or settlement lives so long as a new lawful contract is
brought into being. To argue otherwise is to frustrate
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W.A.No.1727 of 2011
the rule of law. If law is a means to an end -- order in
society -- can it commit functional hara-kiri by leaving
a conflict situation to lawless void?''
In view of the aforesaid settled legal position, therefore,
if any unilateral notice to terminate the binding
settlement of 28-7-1988 was issued by the Corporation
which, on the facts of the present case, is found not to
have been issued, even then till any new settlement on
the question of grant of the payroll check-off facility was
substituted by the parties, the legally binding effects of
the earlier settlement of 1988 would continue to
operate and the Corporation will then be contractually
bound to confer the payroll check-off facility on the
Union. Consequently, there was no occasion for the
Corporation to issue the impugned notification dated
21-9-1993 even on this ground as it was clearly
violative of the mandatory requirement of Section19
sub-section(2) and was contrary to the settled legal
position as aforesaid. It was, therefore, a stillborn
notification and was rightly set aside by the learned
Single Judge on that ground and also by the Division
Bench of the High Court.'
11.A perusal of the above judgment would show that until a
new settlement or contract replaces the previous one, the former
settlement will regulate the relations between the parties and will
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W.A.No.1727 of 2011
bind both the parties. Following the same, the Apex Court in yet
another judgment in the case of Gujarat Agricultural University vs
All Gujarat Kamdar Karmachari Union reported in 2009 (15) SCC
335 has observed as under:
'21. It is an admitted position that no new
settlement has been entered into between the employer
and the workmen subsequently nor has any award
replaced the settlement dated 22-8-1980. In this view of
the matter, it has to be held that the settlement dated
22-8-1980 continues to regulate the conditions of
service of the workmen covered thereby. The contract of
service or the conditions of service provided in the
settlement holds the field until new lawful settlement is
brought into being. As a matter of fact, the employer
was well aware of this legal position and, therefore, the
daily-rated labourers governed by the settlement were
continued to be given only a day off in a week until the
change was effected vide Circular dated 3-10-1991.
Thus, the Industrial Tribunal as well as the High Court
cannot be said to have erred in relying upon the
settlement dated 22-8-1980.'
12.A perusal of the same clearly shows that the contract of
service or the conditions of service provided in the settlement holds
the field until new lawful settlement is being effected. Therefore, in
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the present case, the Settlement dated 30.03.1979 reached under
Section 12(3) of the Act would definitely bind the contesting
respondents.
13.Yet another contention made by counsel for the appellant
that respondents 2 to 18 are not entitled to maintain the
Computation Petitions under Section 33(c)(2) of the Act as they are
not workman is liable to go on the basis of the very admission made
by the Management witness before the Labour Court admitting the
controversy that the Settlement dated 30.03.1979 reached under
Section 12(3) of the Act between them would cover all 38 persons
working in the Bank including respondents 2 to 18 herein. In this
context, it is also pertinent to extract the admission made by M.W.1
before the Labour Court:
'bjh/rh/M/1y; c&uj;J 38 t';fpapy; cs;s midj;J
Chpah;fSf;Fk; bghUe;Jk;/ ,e;j kDjhuh;fSf;Fk;
bghUe;Jk;/ bjh/rh/M/1 xg;ge;jk; bghJ nkyhsh; ,iz
nkyhsh; midtUf;Fk; bghUe;Jtjhfj;jhd; cs;sJ/'
14.Besides, in the cross examination, M.W.1 had clearly
admitted that respondents 2 to 18 do not have the power of signing
cheques; they do not have power to take disciplinary action against
the subordinates; they are not entitled to enter into any settlement
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W.A.No.1727 of 2011
on behalf of the Bank; and they cannot sue on behalf of the Bank. It
is also further admitted that though they are entitled to grant
ordinary leave viz., casual leave, with reference of other leave, they
have only power to make recommendation. They are considered as
Managers only for name sake, but in reality, they were doing the
clerical work for the Bank. These admissions of M.W.1 would not be
impeached. Therefore, the controversy raised by the appellant that
respondents 2 to 18 being the Managers and Assistant managers,
are not workmen and hence, they are not entitled to approach the
Labour Court, cannot be accepted, since M.W.1/Subramanian in his
evidence clearly admits that Ex.W.1 Settlement is applicable to the
petitioners, namely, the contesting respondents herein. Since the
binding effect of the settlement has to continue to bind the parties
by way of contractual obligations, the contention of the appellant
that the contesting respondents before us are not coming within the
purview of workman as defined under Section 2(s) of the Act is not
legally sustainable.
15.In the light of the above judgments, we are of the
considered view that the Labour Court has rightly passed the
common order and the same has been rightly confirmed by the
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W.A.No.1727 of 2011
T.RAJA,J.
and
V.SIVAGNANAM,J.
vga
learned Single Judge. Therefore, the appeal is liable to be
dismissed, hence, the same is dismissed. Consequently, connected
C.M.P. is closed. No costs.
[T.R.,J] [V.S.G.,J]
24.06.2021
vga
Index: Yes/No
To
The Presiding Officer,
Labour Court,
Coimbatore.
W.A.No.1727 of 2011 and
M.P. No.1 of 2011
https://www.mhc.tn.gov.in/judis/
