Allowed

The Management of Blue Star Limited v. v.Mallikarjuna Rao

Telangana HC17 Apr 2009WA/2036/2001

Case brief

AI extract

What is this about?

The High Court allowed a writ appeal against an order granting a workman notional increments. The court held the Industrial Tribunal lacked jurisdiction as the reference was erroneous and the tribunal exceeded its scope. On merits, the court construed the settlement agreement to show the workman waived all claims, including increments, for the specified period.

What did the court decide?

The order dated 28.06.2001 in W.P. No.6143 of 1991 was set aside, and the workman was held not entitled to notional increments for the disputed period.

The Management of Blue Star Limited Vs… — Service and Employment | Telangana HC (2009)

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IN THE HIGH COURT OF JUDICATURE, ANDHRA PRADESH AT HYDERABAD

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FRIDAY, THE SEVENTEENTH DAY OF APRIL TWO THOUSAND AND NINE

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PRESENT THE HON'BLE MR JUSTICE V.ESWARAIAH

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and

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THE HON'BLE MR JUSTICE SANJAY KUMAR

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WRIT APPEAL NO : 2036 of 2001

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(Writ Appeal under Clause 15 of the Letters Patent against the Order dated 28/06/2001 in WP NO : 6143 OF 1991 on the file of the High Court.)

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Between:

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The Management of Blue Star Limited Sarojinidevi Road, Secunderabad. Rep.by its Branch Manager

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..... APPELLANT

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AND

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1 V.Mallikarjuna Rao S/o.V.Krishna Murthy Off:Ex.Workman R/o.Secunderabad 2 The Industrial Tribunal Tilak Road, Hyderabad

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.....RESPONDENT(S)

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Counsel for the Appellant:MR.P.NAGESWAR SREE

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Counsel for the Respondent No.: GP FOR LABOUR

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The Court made the following :

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THE HONOURABLE SRI JUSTICE V.ESWARAIAH AND THE HONOURABLE SRI JUSTICE SANJAY KUMAR

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WRIT APPEAL NO.2036 OF 2001

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O R D E R

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(Per Honourable Sri Justice Sanjay Kumar)

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By order dated 28.06.2001, Writ Petition No.6143 of 1991 was allowed by a learned Judge of this Court. The learned Judge held that there was an error apparent in the Award dated 11.10.1991 passed by the Industrial Tribunal, Hyderabad, in I.D.No.52 of 1988 and consequently directed the Management of Blue Star Limited, Sarojinidevi Road, Secunderabad, (for brevity, ‘the Company’) to sanction notional increments to V.Mallikarjuna Rao, the writ petitioner-workman (for brevity, ‘the workman’), for the purpose of calculation of his pay and to fix the pay accordingly.

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Facts leading up to this lis are as under:

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A reference was made by the Government of Andhra Pradesh under Section 10(1)(d) of the Industrial Disputes Act, 1947 (for brevity, ‘the Act of 1947’) to the Industrial Tribunal, Hyderabad, for adjudication. The terms of the reference were as hereunder:

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“Whether Mr.Mallikarjuna Rao of M/s.Blue Star Limited, Secunderabad, is entitled to count his past service prior to 28.11.1976 for the purpose of increment and other benefits other than the benefit of gratuity under Clause No.2 of agreement dated 05.08.1979?”

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This reference was registered as Industrial Dispute No.52 of 1988.

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The case of the workman before the Tribunal was that he joined the service of the Company in the year 1971, but was out of employment

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from 29.11.1976 upto 05.08.1979. This became the subject matter of I.D.No.8 of 1977 on the file of the Labour Court, Hyderabad, which resulted in an Award directing his reinstatement into service with half the back wages. While so, the Company and the workman entered into an agreement under Section 18(1) of the Act of 1947. As per Clause-2 of the said agreement, the workman was to be regarded as re-employed with effect from 06.08.1979 on the same basic salary and grade that he was drawing when he left the service of the Company. According to the workman, this agreement, which constitutes a binding settlement under Section 18(1) of the Act of 1947, was twisted by the Company to deprive him of continuity of service from 28.11.1976 for the purpose of granting service increments.

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The Company contested the workman’s claim before the Tribunal stating that the very reference under Section 10 of the Act of 1947 was not maintainable and that the settlement between the parties clearly disentitled the workman to the claim that he was putting forth. Reliance was placed on Clause-2 of the settlement to deny the workman’s claim. It was stated that the workman was paid Rs.10,000/- towards exgratia at the time of entering into the settlement.

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It appears that the workman examined himself as W.W.1 and one Stenographer, N.Vasudevan, as W.W.2, while the Company examined its Assistant Manager (Personnel and Administration) as M.W.1. Exs.W.1 to W.7 were marked on behalf of the workman while the Company did not adduce any documentary evidence.

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The Tribunal considered the preliminary objection raised by the Company with regard to the maintainability of the reference and observed that the reference should have rightfully been made under Section 36-A of the Act of 1947 and not under Section-10 thereof. However, taking note of the fact that the matter had been pending before it for two and a half years, the Tribunal held that it makes no difference whether the reference was under Section 10 or under Section 36-A of the Act of 1947. It is relevant to

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note that the Tribunal recognized the fact that the wording of the reference was incorrect inasmuch as the actual dispute was with regard to the entitlement of the workman to count the period between 29.11.1976 to 05.08.1979 for the purpose of computation of increments and other benefits and not whether he was entitled to count his service prior to 28.11.1976 for the said purpose. The Tribunal observed that there was no dispute with regard to the workman being in actual service prior to 28.11.1976 and therefore there was no dispute with regard to his entitlement for the said period. However, the Tribunal expressed its helplessness with regard to this fundamental defect and went on to adjudicate the matter on merits.

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The case, be it before the Tribunal or before this Court, turns upon Clause-2 of the binding settlement entered into between the parties under Section 18(1) of the Act of 1947. Clause-2 reads as hereunder:

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“It is agreed that the period between 29.11.1976 to 05.08.1979 will be treated as absence without pay and the said period will not affect the continuity of service for the purpose of payment of gratuity. There will be no claim or claims against the company for this period.”

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Construing the language used in the above clause, the Tribunal held that the period between 29.11.1976 and 05.08.1979 would be treated as absence without pay but would not affect the continuity of service only for the purpose of payment of gratuity. The Tribunal stressed upon the use of words ‘for the purpose of’ to mean that the workman’s absence without pay during the said period was however to be treated as continuous service only for the purpose of payment of gratuity. The Tribunal also placed reliance on the second sentence that ‘there will be no claim or claims against the Company for this period’ to hold that the workman was not entitled to seek the benefit of notional increments and other benefits during this period. Holding so, the Tribunal answered the reference against the workman.

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Aggrieved thereby, the workman invoked the Certiorari jurisdiction of this Court in W.P.No.6143 of 1991. The learned single Judge opined that Clause-2 of the settlement meant that the workman agreed to forego the back wages only for the said period, as the same will be treated as absence without any pay and that the second limb of Clause-2 of the settlement ‘there will be no claim against the Company for the purpose of that period’ is only with regard to the wages, but not for the increments earned by the petitioner for his past service. The learned Judge therefore held that the petitioner was entitled to notional increments in view of the continuity of service and accordingly, corrected the error said to be apparent on the face of the record by directing the Company to sanction notional increments to the workman for the purpose of calculation and fixation of his pay. The learned Judge did not touch upon the aspect of the validity and correctness of the reference under Section 10 of the Act of 1947 and the adjudication thereof.

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Assailing the correctness of the learned single Judge’s order, Sri P.Nageswara Sree, the learned counsel appearing for the appellant, urged two grounds of attack before us. He argued that the reference itself was not maintainable under Section-10 of the Act of 1947. Secondly, it is his contention that as the reference was wrongly worded, it was not open to the Tribunal or the learned Judge to go beyond the terms of the reference and adjudicate the workman’s claim. On merits, the learned counsel contended that the workman’s claim was opposed to the clear language of Clause-2 of the agreement entered into by the parties and the construction placed upon the clause by the learned Judge was wholly untenable.

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Per contra, Sri V.Hari Haran, learned counsel appearing for the workman, submitted that his client, having succeeded before the Labour Court in I.D.No.8 of 1977, entered into a settlement by way of an agreement with the Company, whereby he gave up his claim for half the back wages awarded by the Labour Court by receiving a lumpsum

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amount of Rs.10,000/-, but did not agree to the exclusion of the period that he was out of service for the purpose of reckoning his increments and other benefits. The learned counsel therefore submitted that the writ appeal deserves to be dismissed.

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The admitted facts stated supra indicate that the workman and the Company entered into an agreement after the passing of the Award in I.D.No.8 of 1977 and the same constituted a binding settlement under Section 18(1) of the Act of 1947. If there was any doubt with regard to Clause-2 of the said settlement, the proper course was for the Government to refer such question to the Tribunal under Section 36-A of the Act of 1947. The said issue did not constitute a ‘matter within the jurisdiction of the Industrial Tribunal’ which could be referred for adjudication under Section 10(1)(d) of the Act of 1947.

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Further, as rightly pointed out by the Tribunal, the reference was completely erroneous in its wording. The dispute raised by the workman was with regard to how the period between 29.11.1976 and 05.08.1979 was to be treated for the purpose of granting increments and other benefits to him. The reference, however, was framed to read as to whether the workman was entitled to count his past service prior to 28.11.1976 for the purpose of increments and other benefits. Unfortunately, the Tribunal, having recognized that this was a fundamental defect in the reference, failed to draw the proper inference therefrom. If there was an error in the reference, it was for the workman to see that the Government rectified the same, be it by making an amendment or by way of a fresh reference. The workman, however, did not do so in the present case. Thus, the Tribunal stood seized of the reference as framed, erroneous as it was.

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I n SOUTH INDIA ESTATE LABOUR RELATIONS

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ORGANISATIONS V/s. STATE OF MADRAS^[1] , a Division bench of the Madras High Court was dealing with the issue as to whether it was open to the Government to amend a reference made by it under Section 10 of

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the Act of 1947. The Court observed that it was open to the Government to make an independent reference concerning any matter not covered by the previous reference and merely because it took the form of an amendment to the existing reference and was not by way of an additional reference, it did not merit interference in writ proceedings, being a mere technicality. It was held that such an objection was one of form and was without substance. Thus, in the present case also, the appropriate Government ought to have either amended the reference or made a fresh reference with regard to the actual dispute between the workman and the Company.

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In view of the failure obtaining in this regard, the question is whether it was open to the Tribunal to travel beyond the scope of the actual reference and decide the real dispute, as perceived by it, between the parties.

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In this regard, it must be remembered that the Tribunal is a creature of the statute and its jurisdiction is necessarily circumscribed by the Act under which it is created. Its adjudication must therefore be confined to the parameters prescribed by the statutory provision. Section-10(4) of the Act of 1947 postulates that where the appropriate Government has specified the points of dispute for adjudication, the Tribunal shall confine its adjudication to those points and matters incidental thereto. In DELHI CLOTH AND GENERAL MILLS COMPANY LIMITED V/s. THEIR WORKMEN^[2] , the Supreme Court while reiterating this position, observed “that something incidental to a dispute must therefore mean something happening as a result of or in connection with the dispute or associated with the dispute. The dispute is the fundamental thing, while something incidental thereto is an adjunct.” In the present case, the actual dispute between the parties cannot be construed to be ‘incidental’ to the erroneous dispute framed in the reference. That being so, the Tribunal ought not to have travelled beyond the scope of the reference and adjudicated what it perceived to be the actual dispute, though the same did not form the point specified in the reference and was not

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incidental thereto.

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In CALCUTTA ELECTRIC SUPPLY CORPORATION LIMITED V/s. CALCUTTA ELECTRIC SUPPLY WORKERS UNION AND OTHERS^[3] , the Supreme Court observed that there can be no doubt that it is only the subject matter of the reference with which an Industrial Tribunal can deal. I n POTTERY MAZDOOR PANCHAYAT V/s. PERFECT POTTERY COMPANY LIMITED^[4] , the Supreme Court reiterated that the Tribunal has no jurisdiction to go behind the reference and enquire into the questions which were not part thereof.

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In view of the aforestated legal position, we are of the view that the Tribunal ought not to have embarked on an enquiry into what it perceived to be the actual dispute between the parties, overlooking the express terms of the reference made to it under Section 10(1)(d) of the Act of 1947.

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Though the matter is amenable to disposal on the above technical grounds, we propose to deal with the issue on merits also. As stated earlier, the case revolves around the construction of Clause-2 of the settlement between the parties. Needless to state, the literal meaning emerging from the language used in the said clause must prevail and it is not open to either party to place its own interpretation or meaning upon the same. A plain reading of Clause-2 shows that the period between 29.11.1976 and 05.08.1979 was to be treated as absence without pay, but the same was not to affect the continuity of service for the purpose of payment of gratuity to the workman. Therefore, the benefit of continuity of service was only limited to payment of gratuity. The words ‘for the purpose of payment of gratuity’ do not lend themselves to any other interpretation.

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Further, the next sentence: ‘there will be no claim or claims against the Company for this period’ puts the matter beyond the pale of doubt. The use of the words ‘claim’ and ‘claims’ clearly demonstrates that no claim of any manner could be raised by the workman for the disputed

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period. The learned single Judge appears to have overlooked the use of the two words ‘claim’ and ‘claims’. By merely taking note of the word ‘claim’, the learned Judge, erroneously came to the conclusion that the same was with regard to the wages and not with regard to increments and other benefits. The plurality indicated in the use of the words ‘claim’ and ‘claims’ leaves no room to doubt that the workman had relinquished his right to raise all claims in respect of the disputed period and the same cannot be construed to be limited only to back wages. We are, therefore, of the opinion that even on merits, the workman was not entitled to raise a claim with regard to sanction of notional increments for the disputed period for the purpose of calculation and fixation of his pay.

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The Writ Appeal is accordingly allowed, setting aside the Order dated 28.06.2001 in Writ Petition No.6143 of 1991, holding that the workman is not entitled to count the period between 29.11.1976 and 05.08.1979 for the purpose of sanction of increments and other benefits, but for reasons other than those stated by the Tribunal. In the circumstances of the case, we are not inclined to make any order as to costs.

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-------------------------V.ESWARAIAH, J.

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---------------------------SANJAY KUMAR, J.

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______APRIL, 2009 PGS

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THE HONOURABLE SRI JUSTICE V.ESWARAIAH AND THE HONOURABLE SRI JUSTICE SANJAY KUMAR

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WRIT APPEAL NO.2036 OF 2001 (Per Honourable Sri Justice Sanjay Kumar)

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_______APRIL, 2009