Partly allowed

Dilip Kumar G. Damani and 8 Ors. v. Kamala Mills Limited

Bombay HC20 Dec 2013WP/857/2011

Case brief

AI extract

What is this about?

Employees of a sick textile company's head office and retail shop sought computation of wages and retrenchment dues under Section 33-C(2) beyond a settlement approved by the Supreme Court. The High Court held the Labour Court could enforce only pre-existing rights under that settlement, quashed directions exceeding it, and allowed the employer's petition in part.

What did the court decide?

Impugned order set aside except to the extent it directs payment strictly in terms of the settlement dated 21.10.1992; shortfall to be made good in four weeks with 6% p.a. interest from 29.3.1994.

Dilip Kumar G. Damani and 8 Ors. Vs Kamala… — Labour and Industrial Disputes | Bombay HC (2013)

¶1

DSS

¶2

wp 248.11 @ wp 857.11

¶3

IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION

¶4

WRIT PETIITON NO.248 OF 2011

¶5

Kam	ala Mills Limited	]
S.B.	Marg, Lower Parel,	]
Mum	bai-400 013	]	.. Petitioner
	vs.
1.	Mr. Dilip Kumar G. Damani	]
2.	Mr. B.M. Singhania	]
3.	Mr. S.N. Lodha	]
4.	Mr. K.L. Vyas	]
5.	Mr. K.N. Mishra	]
6.	Mr. O.P. Saini	]
7.	Mr. A.J. Merchant	]
8.	Mr. S.G. Kawle	]
9.	Late S.K. Sharma (through legal heir Sushila Sharma)	] ]
10.	Mr. P.R. Sharma	]
1.	Mr. Sobhran Sriram	]
2.	Mr. B.K. Dave	]
3.	Late R. G. Parekh (through legal heir wife Kantaben R. Parekh)	] ] ]
14.	Mr. S.G. Chanda	]
15.	Mrs. Geeta Sharma (All c/o. C-602, Sai Tower Old MHB Colony, Gorai Road, Borivli (W),	] ] ] ]
	Mumbai-400 091	]
16.	Presiding Officer	]
	1^stLabour Court, Administrative Building, 1^stFloor, near	] ]
	Chetana College, Govt.Colony	]
	Bandra (E), Mumbai-400 051	]	.. Respondents

¶6

WITH

¶7

WRIT PETITION NO.857 OF 2011

¶8

Mr.Dilip Kumar G. Damani ] 2. Mr. B.M. Singhania ] 3. Mr. S.N. Ladha ] 4. Mr. K.L. Vyas ]

¶9

1/34

¶10

DSS

¶11

wp 248.11 @ wp 857.11

¶12

Mr. K.N. Mishra ] 6. Mr. O.P. Saini ] 7. Mr. A.J. Merchant ] 8. Mr. S.G. Kawale ] 9. Late S.K. Sharma (through ] legal heir Sushila Sharma) ] 10. Mr. P.R. Sharma ] (All c/o. C-602, Sai Tower ] Old MHB Colony, Gorai ] Road, Borivli (W), ] Mumbai-400 091 ] .. Petitioners vs. Kamala Mills Limited ] S.B. Marg, Lower Parel, ] Mumbai-400 013 ] .. Respondent

¶13

*****

¶14

Mr. K.M. Naik, Sr. Advocate a/w. Mr.Sujeet P. Salkar for the Petitioner in W.P.No.248/11 and Respondent in W.P.No.857/11.

¶15

Mr. Arshad Shaikh a/w. Mr.Kedar Dighe for the Petitioner in W.P.No.857/11 and Respondents in W.P.No.248/11.

¶16

¶17

CORAM : M.S.SONAK, J.

¶18

Judgment reserved on : 6^th December 2013 Judgment pronounced on: 20^th December 2013

¶19

JUDGMENT. :-

¶20

1] These two petitions concern order dated 21.10.2010 passed by the

¶21

1^st Labour Court at Mumbai in Application (IDA) No. 64 of 2008, in purported exercise of powers conferred by Section 33-C(2) of the Industrial Disputes Act, 1947 (said Act). The order dated 21.10.2010 shall hereinafter referred to as the impugned order. So also for the sake of convenience, the Kamala Mills Limited-employer shall hereinafter be

¶22

2/34

¶23

DSS

¶24

wp 248.11 @ wp 857.11

¶25

referred to as the 'Petitioner' and Respondent Nos.1 to 15-employees, shall, unless they context requires otherwise, be collectively referred to as the 'Respondents'.

¶26

2] The brief circumstances in which the impugned order came to be made are as follows:-

¶27

(a) The Kamala Mills Limited, operated a mill (Textile Industry), head office and retail shop, which position is not in dispute;

¶28

(b) In pursuance of a general charter of demands raised by the employees of the Petitioner, the Industrial Tribunal made an award in or around the year 1980. According to the Petitioner, this award covers all the employees, i.e., employees of the mill, head office and retail shop. However, according to the Respondents who are the employees of the head office and retail shop, this award concerned only the mill employees and not the head office/retail shop employees.

¶29

(c) Aggrieved by the award, the Petitioner preferred Civil Appeal No.2951 of 1980 directly before the Supreme Court invoking the jurisdiction under Article 136 of the Constitution of India;

¶30

(d) During the pendency of the aforesaid Civil Appeal, the

¶31

3/34

¶32

DSS

¶33

wp 248.11 @ wp 857.11

¶34

Petitioner came to be declared as ‘sick company’ on 27.1.1987 by the B.I.F.R. under the provisions of Sick Industrial Companies Act, 1985 (SICA);

¶35

(e) According to the Petitioner, the mill, head office and retail shop closed operations with effect from 7.11.1988. Settlement talks continued with the employees, which ultimately resulted in an agreement dated 21.10.1992 between the Petitioner and the Rashtriya mill Mazdoor Sangh (RMMS), a representative Union within the meaning assigned to this term under the Bombay Industrial Relations Act, 1946 (BIRA).

¶36

(f) While it is the case of the Petitioner that the agreement dated 21.10.1992 applied to all employees, the Respondents contend that the RMMS was representative Union only in so far as mill employees were concerned and therefore the agreement did not apply to employees at the head office and retail shop like the Respondents.

¶37

(g) The agreement dated 21.10.1992 came to be considered by the BIFR in the context of a scheme for restructuring the Petitioner. The Respondents, represented by late Mr. S.K. Sharma (who was himself one of the employees of the head office) were heard by the BIFR in support of their contentions that the agreement dated 21.10.1992 was not applicable to

¶38

4/34

¶39

DSS

¶40

wp 248.11 @ wp 857.11

¶41

them and in any case, ought not to be made applicable to them. The BIFR by its order dated 6.7.1993 overruled the contentions of the Respondents and accepted the agreement dated 21.10.1992 whilst approving the scheme for restructuring of the Petitioner;

¶42

(h) The Respondents, again through late Mr. S.K. Sharma carried the matter in appeal before AAIFR impugning the BIFR Order dated 6.7.1993 and reiterating the same contentions. The AAIFR, however, dismissed the appeal by order dated 30.9.1993.

¶43

(i) Respondent Nos.1 to 10 (head office employees), again represented by Mr. S.K. Sharma preferred Special Civil No.6880 of 1981 before the Supreme Court of India, inter alia impugning the BIFR order dated 6.7.1993 and AAIFR order dated 30.9.1993.

¶44

(j) Civil Appeal No.2951 of 1980 (impugning award of Industrial Tribunal as aforesaid) and SLP Civil No.6880 of 1981 came to be heard together and were disposed of by the Supreme Court vide common judgment and order dated 29.3.1994. The Supreme Court, in terms accepted the agreement dated 21.10.1992 as being fair and reasonable rejecting contentions made by and on behalf of Respondent

¶45

5/34

¶46

DSS

¶47

wp 248.11 @ wp 857.11

¶48

Nos.1 to 10 and finally modified award of the Industrial Tribunal so as to bring the same in accord with the agreement dated 21.10.1992.

¶49

(k) The Petitioner contends that they have implemented the agreement dated 21.10.1993 as approved by the Supreme Court in its order dated 29.3.1994 in respect of all its employees, i.e., employees at the mill, head office and retail shop. However, as some employees at the head office and retail shop like the Respondents declined to accept benefits, the Petitioner deposited an amount of Rs.9,52,387/- being the amount payable to the Respondents in terms of agreement dated 21.10.1992 with the Maharashtra Labour Welfare Board for the purposes of payment to the Respondents.

¶50

(l) There is no clear record of the Respondents making any serious efforts either to recover amounts in terms of agreement dated 21.10.1992 or the amounts which thereafter came to be claimed in the application made under Section 33-C(2) for the period between 1994-2005. In the year 2005, however, the Respondents preferred Contempt Petition No.221 of 2005 before the Supreme Court alleging failure on the part of the Petitioner to implement and comply with the order dated 29.3.1994, which had approved the agreement dated

¶51

6/34

¶52

DSS

¶53

wp 248.11 @ wp 857.11

¶54

21.10.1992 and even modified the award of the Industrial Tribunal so as to bring the same in accord with agreement dated 21.10.1992.

¶55

(m) The delay in filing the contempt petition was condoned. But the contempt petition came to be dismissed by the Supreme Court by its order dated 28.10.2005. Liberty was however, granted to the Respondents to seek appropriate remedy before the appropriate forum.

¶56

(n) In the year 2008, relying upon liberty as aforesaid, the Respondents preferred Application (IDA) No.64 of 2008 invoking the powers of the Labour Court under Section 33-C(2) of the said Act, seeking payments not merely in terms of agreement dated 21.10.1992 as approved by the Supreme Court in its order dated 29.3.1994 but further arrears of wages and wages on the basis that services of Respondent Nos.1 to 6, 10 to 15 have never been terminated and they continued to

¶57

be in service. In so far as Respondent Nos.7 and 8 are concerned, it was stated that they have resigned services with effect from 16.1.1995 and 4.1.1995 and therefore arrears of wages be paid upto 21.10.1992.

¶58

(o) The Labour Court vide the impugned order dated 21.10.2010 has substantially allowed the Respondent's

¶59

7/34

¶60

DSS

¶61

wp 248.11 @ wp 857.11

¶62

application.

¶63

(p) The Petitioner vide Writ Petition No.248 of 2011 challenges the impugned order in its entirety. Respondent Nos.1 to 10 vide Writ Petition No.857 of 2011 challenge the impugned order to the extent it does not grant them reliefs in entirety.

¶64

3] By the impugned order, the Labour Court has directed the Petitioner:

¶65

(i) To pay the Respondents' amounts in accordance with the Supreme Court order dated 29.3.1994 and agreement dated 21.10.1992;

¶66

(ii) To pay Respondent Nos.1 to 6, 9 and 10 arrears of wages and other benefits for the period between closure of the mill, i.e.,7.11.1988 upto the date of agreement, i.e., 21.10.1992 “ as payable, provided, stipulated & allowed in the settlement BIFR & order of the Hon'ble Supreme Court in Civil Appeal No.1951 of 1980¹ decided alongwith S.L.P.No.6880 of 1981 ”.

¶67

(iii) To pay Respondent Nos.7 and 8 unpaid wages, if so far not paid from if so far not paid from 7.11.1988 upto 16.1.1995 & 4.1.1995 together with gratuity, retrenchment compensation, so

¶68

far as not paid to be worked out on the basis of the period of

¶69

1 This should be Civil Appeal No.2951 of 1980

¶70

8/34

¶71

DSS

¶72

wp 248.11 @ wp 857.11

¶73

their service calculated upto the actual date of resignation i.e., 16.1.1995 & 4.1.1995 respectively.

¶74

(iv) To pay Respondent Nos.11 to 15, if not so not paid their unpaid salary from 7.11.1988 or from the actual date of non payment till the date of their retirement or upto the date or “ upto the date of separation of their services, if any, either by retrenchment or termination by following due process of law, whichever earlier, alongwith all other benefits which they shall be entitled for within that period ”.

¶75

4] Mr. Naik, learned senior counsel appearing for the Petitioner, at the outset, submitted that the Petitioner has already complied with its obligation arising out of the agreement dated 21.10.1992 as approved by the Supreme Court in its order dated 29.3.1994. He further submitted that in case there is any short fall in the amounts paid, or deposited, then the Petitioner, without prejudice to its contention based upon delay and laches, is willing to make good the short fall. In support of the petition, Mr. Naik made the following submissions:

¶76

(a) The very application under Section 33-C(2) was barred by law of limitation or in any case, on account of inordinate delay and laches. To substantiate this submission, Mr. Naik placed reliance upon two decisions of this Court in the case of

¶77

9/34

¶78

DSS

¶79

wp 248.11 @ wp 857.11

¶80

S.A. Shaikh v. Union of India & ors.² and Union of India (through General Manager), Western Railway v. P.S. Pansora³ , which provide that merely because Limitation Act has not been made applicable to proceedings under Section 33-C (2) of the said Act, that by itself does not entitle a Labour Court to entertain old and stale claims;

¶81

(b) All claims, including in particular the claims on the basis that the Respondents services have not been terminated, cannot be said to be based upon any ‘ existing or determined rights ’. Considering the scope and import of Section 33-C(2) of the said Act, therefore, the Labour Court has acted in excess of its jurisdiction in entertaining the same. Reliance was placed upon the cases of the Supreme Court in Municipal Corporation of Delhi v. Ganesh Razak & anr.⁴ and U.P. State Road Transport Corporation v. Birendra Bhandari⁵ , for this proposition .

¶82

(c) Assuming, without admitting that the Labour Court has acted within its jurisdictional bounds, the impugned order is vitiated by unreasonableness and perversity. The relevant materials, including in particular, scope and import of the

¶83

2 2002 III CLR 132

¶84

3 2002 (1) L.L.N.844

¶85

4 1995 1 CLR 170

¶86

5 2006 III CLR 672

¶87

10/34

¶88

DSS

¶89

wp 248.11 @ wp 857.11

¶90

Supreme Court order dated 29.3.1994 has been ignored. The reasoning is vitiated by non-application of mind as well as errors apparent on the face of record. For these reasons, the impugned order warrants interference.

¶91

5] Mr. Shaikh, learned counsel appearing for the Respondents countered the submissions of Mr. Naik and went on to make submissions of his own. The same were broadly as follows:

¶92

(a) The agreement between the Petitioner and RMMS dated 21.10.1992, was restricted to the mill employees and could not be extended to the Respondents, who admittedly were employees at head office/retail shop. This is because the RMMS was a representative Union in terms of the Bombay Industrial Relations Act, 1946 (BIRA), which act in terms of Notification issued thereunder applied only to mills and not to head office or retail shop. Reliance was placed upon the decision in the cases of Krishna Ganapat Kasar vs. India United mills No.2 & Anr.⁶ and National Textile Corpn. (South Mah.) Ltd. vs. Ashok Shridhar Athavale & ors.⁷ in support of this submission ;

¶93

(b) There is nothing in the orders made by BIFR, AAIFR or

¶94

6 2004 II CLR 430

¶95

7 1992-(002)-LLJ-0403-Bom

¶96

11/34

¶97

DSS

¶98

wp 248.11 @ wp 857.11

¶99

the Supreme Court of India, which either notes or approves the termination of the Respondents' services by reference to agreement dated 21.10.1992. Therefore based upon such orders or agreement dated 21.10.1992, no inference much less any conclusion can be drawn of severance of ' employeremployee relationship ';

¶100

(c) Even otherwise severance of 'employer-employee relationship ' in the labour arena can take place inter alia by closure of the industry, abolition of post, resignation, retrenchment or termination. Except in so far as Respondent Nos.7 and 8 who have resigned with effect from 16.1.1995 and 4.1.1995 respectively, none of the modes of severance are attracted to the case of remaining Respondents. Even in so far as Respondent Nos.7 and 8 are concerned, the circumstance that the Petitioner accepted their resignation in the year 1995 is by itself a clear pointer that even the Petitioner regarded them as being in services in the year 1995. The circumstance that such a resignation were purported to be accepted with effect from 7.11.1988 is quite irrelevant, apart from the same being impermissible and illegal. The impugned order which proceeds upon such basis is right, both on facts as well as in law. The error in the impugned order is only to the extent it denies

¶101

12/34

¶102

DSS

¶103

wp 248.11 @ wp 857.11

¶104

Respondent Nos.1 to 6, 9 and 10 the same benefits as have been granted to Respondent Nos.11 to 15. Therefore, Writ Petition No.857 of 2011 by Respondent No.1 to 10 ought to be allowed.

¶105

(d) The Petitioner is unclear whether the alleged severance of 'employer-employee relationship' was brought up on account of closure of industry or abolition of post. From the recitals in the agreement dated 21.10.1992, it is clear that there was no closure of industry, but rather the agreement was for the purposes of revival of industry by down sizing staff. There was never any compliance with statutory pre-condition for effecting of closure. Further there cannot be any abolition of post contrary to provisions of Section 9A read with item 11 of IV^th Schedule to the said Act. In such circumstances, there was neither any de facto nor de jure severance of 'employeremployee relationship'. In the context of Section 9A of the said Act, reliance was placed upon the decision of the Supreme Court in the case of Chaganlal Textile mills (Private) Limited V. Chalisgaon Girni Kamgar Union⁸ .

¶106

(e) In exercise of powers under Section 33-C (2) though the Labour Court may not be entitled to go into the question as to whether termination of services was legal or proper, that does

¶107

8 1959-(002) -LLJ -0001-SC

¶108

13/34

¶109

DSS

¶110

wp 248.11 @ wp 857.11

¶111

not preclude the Labour Court from determining whether in fact there has been any termination or not. The Labour Court having adopted such an approach, has acted within the bounds of its jurisdiction and there is no perversity whatsoever in the findings returned.

¶112

6] As regards, the first submission of Mr. Naik based upon the applicability of law of limitation is concerned, there is ample judicial authority loaded against the proposition advanced. It seems that where the legislature has made no provision for limitation, it would not be open to the courts to introduce any such limitation on grounds of fairness or justice. The words of Section 33-C(2) are plain and unambiguous and it would be the duty of the Labour Court to give effect to the said provision without any consideration of limitation. In the absence any provision for limitation, the Labour Court cannot import any such consideration in dealing with the applications made under Section 33-C(2)⁹ . The Full Bench of this Court in P.K.Porwal (Manager) v. Labour Court, Nagpur¹⁰ , had held that the residuary provision contained in Article 137 of the Limitation Act of 1963 applies to application under Section 33-C(2) of the Industrial Disputes Act, 1947. In the case of Town Municipal Council, Athani v. The Presiding Officer, Labour Court, Hubli¹¹ , the Supreme Court has disapproved the Full

¶113

9 The Bombay Gas Co.Ltd. v. Gopal Bhiva & ors – AIR 1964 SC 752

¶114

10 (1968) 2 LLJ 505

¶115

11 Civil Appeals Nos.170 to 173 of 1968, decided on 20.3.1969

¶116

14/34

¶117

DSS

¶118

wp 248.11 @ wp 857.11

¶119

Bench decision of this Court. This was noted by the Supreme Court itself in the case of Management of State Bank of Hyderabad vs. Vasudev Anant Bhide Etc .¹² , which reiterated the position that the Limitation Act of 1963 does not apply to application under Section 33-C (2) of the said Act, and that no limitation is prescribed for such applications.

¶120

7] On the aspect of delay and laches, learned Single Judge of this Court in the cases of S.A. Shaikh vs. Union of India and Western Railway vs. P. S. Pansora (supra) has ruled that the applications filed after inordinate and unexplained delay deserve dismissal, because it was unreasonable to expect the Railway Authorities to preserve records at this length of time. However, perusal of fact situation in the said cases would reveal that in the intervening period, Railway Authorities had destroyed the documents/materials essential for purposes of defence. Further in the said cases, there was no explanation whatsoever in respect of inordinate delay and laches. In the present case, the Respondents did approach the Supreme Court by way of Contempt Petition No.221 of 2005 seeking implementation of order dated 29.3.1994. The delay in filing the contempt petition was condoned by the Supreme Court and further liberty was also granted to the Respondents to seek appropriate remedy before the appropriate forum. In such circumstances, although there is delay on the part of the Respondents in approaching the Labour Court, the said 12 1969 (2) Supreme Court Cases 491

¶121

15/34

¶122

DSS

¶123

wp 248.11 @ wp 857.11

¶124

Court having exercise its discretion in entertaining the application on merits, I do not deem it appropriate at this stage to interfere with the exercise of such discretion and to non suit the Respondents on the grounds of delay and laches. The aspect of delay shall, however, have a bearing upon other issues raised by the parties in these proceedings.

¶125

8] The moot issue which arises in these petitions is the scope and import of proceedings under Section 33-C(2) of the said Act, 1947, which reads thus:

¶126

“S.33C(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)

¶127

Provided that where the presiding officer of a Labour Court considers it necessary or expedient so to do, he may, for reasons to be recorded in writing, extend such period by such further period as he may think fit”.

¶128

9] The proceedings under Section 33-C(2) of the said Act are in the nature of execution proceedings. The benefit sought to be enforced under Section 33-C(2) of the said Act has to necessarily be a pre-existing benefit or one flowing from a pre-existing right. The difference between preexisting right or benefit on one hand and the right or benefit, which is

¶129

16/34

¶130

DSS

¶131

wp 248.11 @ wp 857.11

¶132

considered just and fair on the other hand, is vital. The former falls within the jurisdiction of the Labour Court exercising powers under Section 33C(2) of the said Act while later does not. In entertaining a claim under Section 33-C(2) of the said Act, Labour Court must clearly understand the limitation under which it is to function. The Labour Court cannot arrogate itself the function of an Industrial Tribunal, which alone is to make adjudication upon a reference made under Section 10 of the said Act. No claim in respect of a matter not based on any existing right can be entertained under Section 33-C (2) of the said Act. By merely making a claim in a loaded form the workmen cannot give the Labour Court jurisdiction under Section 33-C(2) of the said Act¹³ .

¶133

10] Remedy of Section 33-C(2) of the said Act is available only when there is no dispute about entitlement of the workman. That remedy cannot be invoked in a case where the entitlement is disputed. In the case of Chief Superintendent, Government Livestock Farm Hissar vs. Ramesh Kumar¹⁴ , the Supreme Court held that the issue whether a daily wager Welder is entitled to pay and benefits equal to that of a regular Welder could not be determined in proceedings under Section 33-C(2). The proper course is to have the entitlement to regular scale determined by a competent court or tribunal and in the event of non payment of the amount

¶134

13 Central Inland Water Transport Corporation Ltd. vs. The Workmen and Anr., (1974) 4 SCC 696 & U.P. State Road Transport Corporation v. Bijendra Bhandari – 2006 III CLR 672 14 (1997) 11 SCC 363

¶135

17/34

¶136

DSS

¶137

wp 248.11 @ wp 857.11

¶138

payable as per the entitlement, remedy under Section 33-C(2) could be invoked, but not otherwise.

¶139

11] In the context of Section 6-H (1) of U.P. Industrial Disputes Act, 1947, which is pari materia with Section 33-C(2) of the said Act, the Supreme Court has held that the provision is in the nature of execution proceeding. The provision can be invoked inter alia in the event any money is due to the workmen under an award. The provision cannot be invoked in a case where ordinarily an industrial dispute can be raised and can be referred for adjudication by the appropriate Government to an Industrial Court. The Authorities to determine a matter arising under Section 6-H of the U.P. Act and an industrial dispute raised by the workmen are different. Section 6-H (1) of the Act, it will bear repetition to state, is in the nature of an execution proceedings. The Authority vested with the power thereunder cannot determine any complicated question of law. It cannot determine a dispute in regard to extent of a legal right. It cannot usurp the jurisdiction which is not vested in it¹⁵ .

¶140

12] In the case of State of Bank of India v. Ram Chandra Dubey & ors.¹⁶ , the Industrial Tribunal upon a reference under Section 10 found that the termination of services of the workmen was not legal and justified and

¶141

15 Hamdard (WAKF) Laboratories vs. Dy. Labour Commissioner and ors.- (2007) 5 SCC 281 16 (2001) 1 Supreme Court Cases 73

¶142

18/34

¶143

DSS

¶144

wp 248.11 @ wp 857.11

¶145

that workmen concerned were entitled to reinstatement from the date of termination. However, no finding was given in regard to payment of back wages. Therefore, the workmen filed an application under Section 33-C(2) seeking computation of back wages on the basis of award of the Industrial Tribunal. The Supreme Court, however, rejected such claim by observing thus:

¶146

“7. When a reference is made to an Industrial Tribunal to adjudicate the question not only as to whether the termination of a workman is justified or not but to grant appropriate relief, it would consist of examination of the question whether the reinstatement should be with full or partial back wages or none. Such a question is one of fact depending upon the evidence to be produced before the Tribunal. If after the termination of the employment, the workman is gainfully employed elsewhere it is one of the factors to be considered in determining whether or not reinstatement should be with full back wages or with continuity of employment. Such questions can be appropriately examined only in a reference. When a reference is made under Section 10 of the Act, all incidental questions arising thereto can be determined by the Tribunal and in this particular case, a specific question has been referred to the Tribunal as to the nature of relief to be granted to the workmen.

¶147

8. The principles enunciated in the decisions referred by either side can be summed up as follows:

¶148

Whenever a workman is entitled to receive from his employer any money or any benefit which is capable of being computed in terms of money and which he is entitled to receive from his employer and is denied of such benefit can approach Labour Court under Section 33-C(2) of the Act. The benefit sought to be enforced under Section 33-C(2) of the Act is necessarily a pre-existing benefit or one flowing from a pre-existing right. The difference 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 is vital. The former falls within jurisdiction of Labour Court exercising powers under Section 33-C(2) of the Act while the latter does not. It

¶149

19/34

¶150

DSS

¶151

wp 248.11 @ wp 857.11

¶152

cannot be spelt out from the award in the present case that such a right or benefit has accrued to the workman as the specific question of the relief granted is confined only to the reinstatement without stating anything more as to the back wages. Hence that relief must be deemed to have been denied, for what is claimed but not granted necessarily gets denied in judicial or quasi-judicial proceeding. Further when a question arises as to the adjudication of a claim for back wages all relevant circumstances which will have to be gone into, are to be considered in a judicious manner. Therefore, the appropriate forum wherein such question of back wages could be decided is only in a proceeding to whom a reference under Section 10 of the Act is made. To state that merely upon reinstatement, a workman would be entitled, under the terms of award, to all his arrears of pay and allowances would be incorrect because several factors will have to be considered, as stated earlier, to find out whether the workman is entitled to back wages at all and to what extent. Therefore, we are of the view that the High Court ought not to have presumed that the award of the Labour Court for grant of back wages is implied in the relief of reinstatement or that the award of reinstatement itself conferred right for claim of back wages ”.

¶153

13] Though in determining the scope of Section 33-C(2) of the said Act, care must be taken not to exclude cases which ultimately fall within its purview, it must also be borne in mind that cases which fall within the purview of Section 10(1) of the said Act, cannot be brought within the scope of Section 33-C (2) of the said Act. Whilst it may be open to a Labour Court in appropriate cases to interpret the award or settlement on which the claim is based, the Labour Court cannot go behind the award or settlement, nor can it add to or subtract from the provision of the settlement or award. If an employee is dismissed or demoted and it is his

¶154

20/34

¶155

DSS

¶156

wp 248.11 @ wp 857.11

¶157

case that the dismissal or demotion is wrongful, it would not be open to him to make a claim for recovery of his salary and wages under section 33-C(2). His demotion or dismissal may give rise to an industrial dispute which may be appropriately tried, but once it is shown that the employer has dismissed or demoted him, a claim that the dismissal or demotion is unlawful and therefore the employee is continued to be the employee of the workman of the employer and is entitled to the benefits due to him under a pre-existing contract, cannot be made under Section 33-C (2)¹⁷ .

¶158

14] Applying the aforesaid principles, which deal with the scope and import of proceedings under Section 33-C(2) of the said Act to the present case, in my judgment, the Labour Court in exercise of powers under Section 33-C(2) could have only entertained the claim based upon agreement dated 21.10.1992 as approved by the Supreme Court in its order dated 29.3.1994. To the extent therefore, the Labour Court directs payments (if not already made) in terms of agreement dated 21.10.1992 as approved by the Supreme Court in its order dated 29.3.1994, there is no reason to interfere. However, considering the ambiguity in the impugned order, it is clarified that the directions are liable to be issued to the Petitioner to pay to the Respondents (if not already paid or deposited) the following amounts:

¶159

17 The Central Bank of India Ltd. v. P.S. Rajagopalan – AIR 1964 Supreme Court 743

¶160

21/34

¶161

DSS

¶162

wp 248.11 @ wp 857.11

¶163

(a) unpaid wages, if any, upto 7.11.1988; and

¶164

(b) Amounts towards gratuity, retrenchment compensation

¶165

and other statutory dues upto 7.11.1988;#

¶166

# Gratuity and retrenchment compensation shall be

¶167

calculated on the basis of wages comprising basic wages and D.A. as were drawn by the concerned workman as on the date of the closure of the mills. However, in the computation of the length of the service of the employees, the period commencing from the date of closure of the mill, i.e., 7.11.1988 to the date of the memorandum of understanding (21.10.1992) shall also be included.

¶168

15] The Labour Court has failed to ascertain whether or not the amounts as aforesaid have been paid or deposited by the Petitioner. The Petitioner has placed material on record evidencing deposit of a sum of Rs.9,52,387/- with the Maharashtra Labour Welfare Board towards payment of such amount, since according to the Petitioner the Respondents despite the offer, declined to accept the same. The Officer from the Maharashtra Labour Welfare Board, who was summoned to depose in the matter has confirmed such deposit as against the names of 15 Respondents.

¶169

22/34

¶170

DSS

¶171

wp 248.11 @ wp 857.11

¶172

Sr.No.	Name of the employee	Amount (in Rs.)
1	B.M. Singhania	95,306.00
2	D.K. Samani	73,126.00
3	K.L. Vyas	87,593.00
4	K. N. Mishra	1,06,592.00
5	O.P. Saini	95,503.00
6	P.R. Sharma	87,783.00
7	S.K. Sharma	1,55,614.00
8	S.N. Laddha	94,294.00
9	B.K. Dave	26,904.00
10	Sobran Shiram	24,880.00
11	S.R. Chanda	20,839.00
12	R.G. Parikh	24,642.00
13	Geeta Sharma	24,242.00
14	Prahlad Sharma	21,171.00
15	Laltaprasad Pande	19,885.00

¶173

23/34

¶174

DSS

¶175

wp 248.11 @ wp 857.11

¶176

16] This Court at the stage of grant of rule and interim reliefs by order dated 23.2.2011, had directed the Petitioner as a pre-condition for interim stay to pay to the concerned workmen in terms of the agreement dated 21.10.1992 and order of the Supreme Court, if not already paid. At that stage, it was pointed out by Mr. Naik appearing for the Petitioner that some amounts have been paid. Mr. Shaikh appearing for the Respondents pointed out that amounts have not been paid, but have been deposited with the Maharashtra Labour Welfare Board. Accordingly, this Court held that the Respondents shall be entitled to withdraw the sums so deposited but without prejudice to the rights and contentions of the parties. In respect of Respondent Nos.7 and 8, interim stay was granted subject to the Petitioner depositing the amount of unpaid wages from 7.11.1988 till 21.10.1992. The interim order had made it clear that if some amounts in respect of the Respondents is lying deposited with the Labour Board, amounts to be deposited in terms of agreement dated 21.10.1992 and the Supreme Court order, shall exclude the said deposited amount and only the deficit shall be made good by the Petitioner.

¶177

17] In case, the amounts reflected in the aforesaid Chart together with the amounts deposited/paid in terms of the interim order dated 23.2.2011 do not correspond with the amounts to be determined as per directions contained in paragraph 14 of this judgment and order, then the Petitioner

¶178

24/34

¶179

DSS

¶180

wp 248.11 @ wp 857.11

¶181

true to its statement made through his learned senior counsel, shall make good the short fall within a period of four weeks from the date of this judgment and order. Upon such short fall, the Petitioner is directed to pay interest at the rate of 6% per annum from 29.3.1994 till date of payment. The directions to pay interest have been made taking into consideration the peculiar facts and circumstances of the present case. The rate has been determined by taking into consideration the circumstance that the Respondents failed to approach the statutory authorities within reasonable time and therefore it may not be proper to saddle the Petitioner with any higher rate of interest. So also, once it is determined that there was a short fall, it may not be proper that the workmen are deprived of interest upon such short fall. Needless to mention that the Respondents shall be entitled to withdraw from the Maharashtra Labour Welfare Board the amounts indicated against their names in the aforesaid Chart alongwith interest, if any, as may have been accrued thereon.

¶182

18] In case there is any difficulty in obtaining the aforesaid amounts from the Maharashtra Labour Welfare Board, the Respondents are at liberty to approach the Labour Court, which shall issue appropriate directions to the Maharashtra Labour Welfare Board for the purposes of ensuring that the Respondents obtain the said amounts within a reasonable period from the Board. The Labour Court, if approached shall

¶183

25/34

¶184

DSS

¶185

wp 248.11 @ wp 857.11

¶186

endeavour to dispose of the proceedings before it within a period of eight weeks.

¶187

19] The impugned order to the extent it directs payments over and above payments to be computed in terms of agreement dated 21.10.1992, in my judgment, is vitiated by jurisdictional errors, as also errors apparent on face of record.

¶188

20] The impugned order had directed payment of arrears of wages to Respondent Nos.7 and 8 upto 16.1.1995 and 4.1.1995, even though the said Respondents had applied for payment of wages only upto 21.10.1992. This was a clear error apparent on face of record. Further the Labour Court directed payment of arrears of wages for the period between 7.11.1988 (i.e. date of closure) and 21.10.1992 (i.e. date of agreement). This is again a result of misreading the terms contained in the agreement dated 21.10.1992. Mr. Shaikh's defence, by reference to a stray sentence from the Supreme Court's order dated 29.3.1994, is quite unfounded. The Supreme Court order dated 29.3.1994 is required to be read in its entirety and a stray sentence cannot be read out of the context. The Supreme Court, in terms approves the agreement dated 21.10.1992 and by way of final relief modifies award of the Industrial Tribunal so as to bring the same in accord with the agreement dated 21.10.1992. Therefore, particularly in

¶189

26/34

¶190

DSS

¶191

wp 248.11 @ wp 857.11

¶192

proceedings under Section 33-C (2) of the said Act, the Labour Court could not have directed any payments over and above those specified in the agreement dated 21.10.1992.

¶193

21] The contentions of Mr. Shaikh as recorded in paragraph 5 of this judgment and order stand substantially answered by reference to the Supreme Court order dated 29.3.1994, which is transcribed below in its entirety:-

¶194

“We have heard the parties. There is not dispute that the appellant-mills was declared sick on 27.01.1977 (1987) and ultimately it was closed on 07.11.1988. Thereafter, the BIFR framed a Scheme for reconstituting the company on 06.07.1993. An appeal filed by the Union against the said Scheme was dismissed on 30.09.1993. It appears that against the said dismissal, Shri. S.K. Sharma, an employee of the Company has preferred a special leave petition in this court which is pending and in which notice had been issued by us today. That has nothing to do with the matters in issue before us.

¶195

In view of the sickness of the mills and the reconstitution of the company, there was an agreement arrived at between the mill Mazdoor Sangh, i.e., the Union representing the workmen of the mills and the appellantmills on 21.10.1992, where under the Tribunal's award impugned in the present appeal by the mills was modified by consent. It is not necessary to go into the details of that agreement. Suffice it to say that what was broadly agreed upon between the parties was that as far as the regular employees are concerned, they would be entitled to all the arrears of wages including dearness allowance they were drawing on the date of the closure of the mills, viz., 07.11.1982 (07.11.1988). The arrears of wages were to be calculated and paid till 21.10.1992 which is the date of the agreement. The workers were further to be paid gratuity and retrenchment compensation on the basis of basic wage plus dearness allowance, also calculated till 21.10.1992.

¶196

27/34

¶197

DSS

¶198

wp 248.11 @ wp 857.11

¶199

There is no dispute that out of the 56 members of the staff which included 5 technicians and 51 clerks, five technicians have been retained and 51 clerks have been retrenched. Out of 51 clerks, 41 have accepted the agreement. Before us, they are represented by Shri. S.K. Sharma who appears through his learned counsel. It was pointed out by the learned counsel that the wages and dearness allowance paid to the clerical staff have remained constant since 1962 and the impugned award given by the Tribunal had enhanced them. The purport of the agreement in question is to deny the employees the benefit of the improved pay-scales and the dearness allowance. He, therefore, urged that the clerks concerned should be paid at least the wages and the dearness allowance as awarded by the Tribunal. We are afraid that this contention forgets the fact that the mills which was declared as a sick unit on 27.08.1987 (27.01.1987) has since closed down and the BIFR had to frame a scheme for reconstituting the company. The Appellant Authority has placed its seal on the said scheme. In the absence of the agreement in question, the employees represented by the learned counsel would have been required to stand in queue for their dues even under the old scales of pay and dearness allowance. It is not known that percentage of their dues they would have secured by this process and when. We may also take note of the fact that the Union has been in the field for several years and knows where the interests of the workers lie. They would not have reached the agreement in question if it was not in the interests of the employees. There is no reason to believe that the Union has sacrificed the interests of the workmen by entering into the said agreement. In view of this and in view of the further fact that an overwhelming majority of the employees has accepted the agreement, we are of the view that the agreement in question should be accepted as a reasonable one. In the circumstances, we allow the appeal and modify the impugned award in terms of the agreement arrived at between the appellant – mills and the mills Mazdoor Sangh on 21.10.1992.

¶200

In view of the order passed by this court on 10.09.1984 which directed the appellant-mills to pay fees of the lawyer engaged by the employees, we direct the appellant- mills to pay to the respondent's lawyer a sum of Rs.5,000/- as his fees.

¶201

S.L.P.(C) No.6880 of 1981.

¶202

28/34

¶203

DSS

¶204

wp 248.11 @ wp 857.11

¶205

In view of the order in the above appeal, the special leave petition stands disposed of.

¶206

(emphasis supplied)

¶207

22] The contention that agreement dated 21.10.1992, does not apply to the employees of the head office/retail shop or that the same is not fair and proper cannot be raised by the Respondents, in the light of observations made by the Supreme Court in its order dated 29.3.1994. Besides, such contentions transgress the limited scope of proceedings under Section 33-C(2) of the said Act. In the context of very similar contentions raised by the Respondents, the Supreme Court in its order dated 29.3.1994 has observed that in the absence of agreement in question, the Respondents would have been required to stand in queue for their dues even under the old scale of pay and dearness allowance and it is not known what percentage of their dues they would have secured by this process and when. The Supreme Court also noted the fact that the RMMS-Union had been in the field for several years and knows where the interest of the workers lie and that the Union would not have reached the agreement in question, if it was not in the interest of the employees. The order further proceeds to observe that there is no reason to believe that RMMS has sacrificed the interest of the workmen by entering into the said agreement. In view of this and in view of the further fact that an overwhelming majority of the employees had accepted the agreement, the Supreme Court expressed the view that the agreement in question should

¶208

29/34

¶209

DSS

¶210

wp 248.11 @ wp 857.11

¶211

be accepted as a reasonable one.

¶212

23] There is ample material on record, particularly, in the form of agreement dated 21.10.1992 and the order of Supreme Court dated 29.3.1994, from which the inference is almost irresistible that there was a de facto cessation of ' employer-employee relationship ' between the Petitioner and the Respondents. The agreement and the Supreme Court order make reference to closure with effect from 7.11.1988. This may not be a closure as understood under the said Act, because there is material on record as pointed out by Mr. Shaikh that even in terms of the agreement dated 21.10.1992, the industry was to operate with a reduced work force. Nevertheless, the material on record bears out that even the Respondents have factually not worked at head office/retail shop since 7.11.1988. The contention that abolition of post was contrary to Section 9A or that the closure was contrary to Chapter V-B of the said Act, is a contention quite alien to the scope and ambit of a jurisdiction of a Labour Court under Section 33-C (2) of the said Act. If the Labour Court in proceedings under Section 33-C(2) could not have entertained such a contention, obviously this Court would loathe to entertain the same in these proceedings, which question the exercise of jurisdiction by the Labour Court.

¶213

30/34

¶214

DSS

¶215

wp 248.11 @ wp 857.11

¶216

24] As pointed out earlier, although, I have held that the Labour Court committed no jurisdictional error in entertaining the application which was filed belatedly, nevertheless, the circumstance that the Respondents took no steps whatsoever to assert their alleged continuance in service from 7.11.1988 for a period by virtually 15 to 16 years, is a circumstance, which needs to be held against the Respondents, particularly, when they contend that they continued to be in employment for all these years. Further if the Respondents were serious about their contentions that the agreement dated 21.10.1992 is not at all applicable to them, then there is no explanation forthcoming as to why the Respondents contested the agreement before the authorities under the SICA and finally the Supreme Court. There is no explanation as to why the Respondents preferred the contempt petition before the Supreme Court seeking enforcement of the agreement dated 21.10.1992, which had been approved by the Supreme Court in its order dated 29.3.1994. In any case, all these contentions, in my judgment, were clearly alien to the scope and import of proceedings under Section 33-C(2) of the said Act.

¶217

25] The Supreme Court in its order dated 29.3.1994 has noted that out of 56 members of the staff, which included 5 technicians and 51 clerks, five technicians have been retained and 51 clerks have been retrenched. Out of 51 clerks, 41 have accepted the agreement. Respondent No.1 to 10

¶218

31/34

¶219

DSS

¶220

wp 248.11 @ wp 857.11

¶221

appear to be 10 workers, who had not accepted the agreement. Upon consideration of their objections, the Supreme Court rejected the same and ruled that the agreement in question should be accepted as a reasonable one. The Labour Court, in the impugned order has directed payment of wages to ten Respondents upto 21.10.1992, which by itself was ultra vires . In so far as Respondent Nos.11 to 15 are concerned, on the ground that they were not parties before the Supreme Court, the Labour Court has directed payment of wages until there is cessation of ' employer-employee relationship '. This direction is also ultra vires . Based upon this direction, it is impermissible for Respondent Nos.1 to 10 to seek parity. It is trite that there can be no equality of illegalities. In any case, equality is restored by holding that none of the Respondents in proceedings under Section 33-C(2) of the said Act are entitled to any amounts over and above those to be determined in accordance with the agreement dated 21.10.1992. There is accordingly no merit in Writ Petition No.857 of 2011, which is liable to be dismissed.

¶222

26] In the aforesaid circumstances, the following order is passed:-

¶223

A] Writ Petition No.857 of 2011 is dismissed and Rule made therein is discharged. B] Writ Petition No.248 of 2011 is partly allowed.

¶224

32/34

¶225

DSS

¶226

wp 248.11 @ wp 857.11

¶227

C] The impugned judgment and order is quashed and set aside except to the extent it directs the payments to the Respondents strictly in terms of agreement dated 21.10.1992 (as interpreted in paragraph 14 of this judgment), if not already made or deposited;

¶228

D] The Respondents are held entitled to receive from the Maharashtra Labour Welfare Board the amounts set out against their respective names in the Chart at Paragraph 15 of this judgment and order by applying to the Maharashtra Labour Welfare Board. The amounts alongwith accrued interest, if any, shall be paid by the Board to the Respondents within four weeks from the date of such application. In case there is any difficulty in obtaining such amounts from the Board, the Respondents are at liberty to approach the Labour Court, which shall entertain such applications and pass appropriate orders thereon as observed in paragraph 18 of this judgment and order.

¶229

E] In the event the amounts referred to in the Chart in paragraph 15 together with the amounts deposited/paid in terms of the interim order dated 23.2.2011 do not correspond with the amounts to be determined as per the directions in paragraph 14 of this judgment and order, the Petitioner shall make good the short fall within a period of four weeks from the date of this judgment and order. Upon short fall, the Petitioner shall pay interest at the rate of

¶230

33/34

¶231

DSS

¶232

wp 248.11 @ wp 857.11

¶233

6% per annum from 29.3.1994 till the date of effective payment.

¶234

F] In the unlikely event of the amounts already paid (not merely deposited) by the Petitioner to the Respondents exceed the amounts payable (as per directions in paragraph 14 of this judgment and order), the Petitioner shall not take out any proceedings for refund or recovery thereof from the Respondents. This direction is made taking into consideration the lapse of time and advanced age of the workmen.

¶235

G] Upon payments as directed by this judgment and order, the balance amount, from out of the deposits made in terms of interim order dated 23.2.2011 shall be returned to the Petitioner by the Registry alongwith accrued interest thereon, if any.

¶236

H] Liberty is granted to the parties to approach the Labour Court

¶237

in case of any difficulties in implementation of this order.

¶238

I] There shall be no order as to costs.

¶239

(M. S. SONAK, J.)

¶240

dinesh

¶241

34/34

Dilip Kumar G. Damani and 8 Ors. v. Kamala Mills Limited

Case brief

What is this about?

What did the court decide?

Dilip Kumar G. Damani and 8 Ors. v. Kamala Mills Limited

Case brief

What is this about?

What did the court decide?

What the court decided

A compact analysis

Issues for consideration

Cases cited

Statutes considered

Parties & counsel

Coram

Case details

Similar cases

M/S. Kachins Vs Maharashtra General Kamgar Mahasangh and 6 0RS.

Ramesh Advani Vs Swiss Air Transport Co.

Capt. S.K. Mishra and Ors. Vs the District Deputy Registrar, C.S., and Ors.

Sir Kikabhai Premchand Trust Set Lenent No.Xi Vs the State of Maharashtra and Another

National Aviation Co. of India Ltd. Vs Mumbai Mazdoor Sangh and Anr.

Xerox India Limited Vs Chetan Anantrai Doshi