Orissa High Court
Jagannath Barik vs Labour Court And Anr. on 22 April, 1992
Equivalent citations: (1993)ILLJ534ORI
Author: D.P. Mohapatra
Bench: D.P. Mohapatra
JUDGMENT J.M. Mahapatra, J.
1. In this batch of writ applications, challenge has been made by the petitioners to the orders of the Labour Court, Bhubaneswar, passed under Section 33-C(2) of the Industrial Disputes Act, allowing the claim of bonus and differential house rent allowances of the employees of the Board, and in one case (O.J.C. No. 2879/90) refusing such claim to the employee. As common questions of fact and law are involved in all these applications, the petitions were heard analogously with the consent of the counsel for both the parties, and these are being disposed of by this common judgment.
2. The facts of the case may be briefly stated thus: The petitioners in all the cases except one, are employees of the Orissa Khadi and Village Industries Board which is a statutory board constituted under the Orissa Khadi and Village Industries Board Act, 1955 (Orissa Act 3/1956); for the purpose of organising, developing and regulating the Khadi and Village Industries in the State of Orissa. The functions and activities of the Board are governed by the aforesaid Act (for short, "1955 Act") and a set of rules, Orissa Khadi and Village Industries Board Rules, 1956 (for short, "1956 Rules") and a set of regulations known as Orissa Khadi and Village Industries Board Regulations, 1960 (for short "1960 Regulations"). Although the Board is a public undertaking of the State Government and the State Government has direct control over the activities of the Board, and the employees are also governed mainly by the conditions of service provided for in Orissa Service Code, which is applicable to all the Government servants, yet the Board has been adjudicated by this Court to be Industry as defined in Section 2(j) of the Industrial Disputes Act (for short, "I.D. Act"). The Board is, therefore, recognised as an industry for the purpose of the I.D. Act. The employees of the Board were not being paid any bonus, but they were being paid house rent allowance on similar lines with the State Government employees in accordance with the guidelines of the Finance Department Resolution governing the field from time to time. The employees made a grievance about the house rent allowances when it was reduced from 12 1/2% of the basic pay to 7 1/2% from the year 1976. They also made a claim of entitlement to bonus under the Payment of Bonus Act, 1965 (for short, "Bonus Act"). The Board had raised objections to these claims of the employees in its written statement filed before the Labour Court in all these proceedings. It had contended, inter alia, that the employees of the Board are not entitled to payment of bonus as the Board is covered by the exception provided under Section 32(iv) of the Bonus Act, which states that nothing in this Act shall apply to employees employed by an establishment engaged in any industry carried on by or under the authority of any department of the Central Government or a State Government or local authority. According to the Board, as it is run by and under the authority of the Department of Industry of the State, it is not liable to pay Bonus to its employees. As to the payment of differential house rent allowances, the Board has contended that house rent allowance is being paid to the employees like the employees of the State Government in accordance with the guide-lines provided by the State Government in F.D. Resolutions from time to time. In consequence of pay revisions effected in the year 1974, the house rent allowance was reduced to 7 1/2 % in the case of the employees, and as such the employees are not entitled to 12 1/2% house rent allowance with effect from 1976 as claimed by them.
3. In this batch of writ applications, similar contentions have been raised before this Court by the Board with regard to the claim of the bonus and differential house rent allowances. The three-fold contentions raised by the Board to challenge the orders of the Labour Court are that:
Point (1):-The Labour Court in a proceeding under Section 33-C(2) of the I.D. Act is not competent to decide whether the employees are entitled to bonus and differential house rent allowances, when the Board disputes the entitlement of the employees to such claims. Considering the nature of the dispute it is quite proper that the matter should be decided as an industrial dispute under Section 10(1)(d) of the I.D. Act, in which case the Industrial Tribunal and not the Labour Court is the proper authority to deal with the matter, in as much as the question of payment of bonus and allowances which include house rent allowances have been included in Third Schedule of the I.D. Act, thereby indicating that the matters are to be decided by the Industrial Tribunal and not by the Labour Court for which the matters enumerated in the Second Schedule only are set out. It is contended that within the scope and ambit of Section 33-C(2) of the I.D. Act the question of payment of bonus and house rent allowance should not have been decided by the Labour Court.
Point (2): The second contention relates to the applicability of the Bonus Act to the Board, which is an establishment in the public sector. In view of the provisions of Section 20 read with Section 22 of the Bonus Act, it is contended that the dispute with respect to bonus payable under the Act being an Industrial Dispute should be referred to Industrial Tribunal for adjudication. It is further contended that the Board being an industry carried on by the authority of the State is exempted from the purview of the Bonus Act under Section 32(iv) of the said Act, as also under Section 32(v)(c) of the Act.
Point (3):- The third contention relates to the differential house rent allowances. The contention of the Board is that as the employees of the Board are governed by the statutory regulation and the Orissa Service Code with respect to the payment of the allowances including house rent allowances on the basis of the decision of the State Government from time to time, the provisions of Section 9-A of the I.D. Act is not applicable. It is further contended that having regard to the provisions contained in proviso (b) of Section 9-A of the I.D. Act, the Board as an employer is not required to give notice to the employees about the change in the scale of house rent allowances.
4. No counter has been filed by any of the employees opposite parties in the writ applications, but the matters being heard analogously, the learned counsel appearing for the employee petitioner in O.J.C. No. 2879/90 has also argued the case on behalf of the employees-opposite parties in other writ applications, He has contested the various contentions raised on behalf of the Board having regard to all the three points indicated above.
5. The first point dealing with the jurisdiction competence of the Labour Court to deal with the disputed claims, we propose to first take it up for determination. As discussed earlier, the Board had from the very beginning in its written statements filed before the Labour Court disputed and resisted both the claims raised by its employees, namely, the entitlement to bonus and to differential house rent allowance. The Labour Court, however, on the materials on record thought that it had jurisdiction to dispose of both the matters and had accordingly adjudicated upon the claims. The question is whether the type of claims raised in this batch of cases can appropriately be adjudicated in a proceeding under Section 33-C(2) of the I.D. Act. For proper appreciation, we excerpt the said provision of the Act:
"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".
6. It is strenuously urged by Mr. Das, learned Counsel for the Board, that the jurisdiction of a Labour Court under Section 33-C(2) is like that of an executing Court in a civil proceeding and not like the principal Court to decide the issues involved in a suit, and as such any disputed question of law and/or fact is beyond its scope. It is contended that as the entitlement to bonus and differential house rent allowance are vehemently opposed from the very beginning, these matters should have been adjudicated upon a reference like an industrial dispute under Section 10(1)(d) of the I.D. Act by the Industrial Tribunal, but should not have been decided by the Labour Court. A few authorities of the Apex Court and of some High Courts have been relied upon in support of its contention, namely, the case of C.I.W.T. Corporation v. Workman, A.I.R. 1974 S.C. 1604, in which some earlier decisions of the Apex Court like Central Bank of India Ltd. v. P.S. Rajgopalan 1963-II-LLJ-89 and Ankapali Co-operative Society v. Workman 1962-II-LLJ-621 and East India Coal Company v. Rameswar 1968-I-LLJ-6 were noticed (besides) the cases of G.M. Ordnance Parachute Factory, Kanpur v. Presiding Officer, Central Government Industrial Tribunal- cum- Labour Court, Kanpur and Anr. 1987 Lab. I.C. 365 and in the case of C.LW.T. Corporation Their Lordships of the Apex Court in C.I.W.T. Corporation's case (supra) in dealing with the scope of a proceeding under Section 33-C(2) I.D. Act has held thus:
"Proceeding under Section 33-C(2) is a proceeding, generally in the nature of an execution proceeding, wherein the Labour Court calculates the amount of money due to a workman from his employer, or if the workman is entitled to any benefit which is capable of being computed in terms of money, the Labour Court proceeds to compute the benefit in terms of money. This calculation or computation follows upon an existing right to the money or benefit, in view of its being previously adjudged, or, otherwise duly provided for. In a suit, a claim for relief made by the plaintiff against the defendant involves an investigation directed to the determination of (i) the plaintiff's right to relief; (ii) the corresponding liability of the defendant, including, whether the defendant is, at all, liable or not and (iii) the extent of the defendant's liability, if any. The working out of such liability with a view to give relief is generally regarded as the function of an execution proceeding. Determination No. (iii) reference to above, that is to say, the extent of the defendant's liability may sometimes be left over for determination in execution proceedings. But that is not the case with the determinations under heads (i) and (ii). Since a proceeding under Section 33-C(2) is in the nature of an execution proceeding it should follow that an investigation of the nature of determinations (i) and (ii) above is, normally, outside its scope. It is true that in a proceeding under Section 33-C(2), as an execution proceeding, it may be necessary to determine the identity of the person by whom or against whom the claim is made if there is a challenge on that score. But that is merely 'incidental'. Therefore, when a claim is made before the Labour Court under Section 33-C(2) that Court must clearly understand the limitations under which it is to function. It cannot arrogate to itself the functions-say of an Industrial Tribunal which alone is entitled to make adjudications in the nature of determinations(i) and (ii) referred to above or proceed to compute the benefit by dubbing the former as 'incidental' to its main business of computation. In such cases, determinations (i) and (ii) are not 'incidental' to the computation. The computation itself is consequential upon and subsidiary to determinations (i) and (ii) as the last stage in the process which commenced with a reference to the Industrial Tribunal."
The ratio of the decision would thus go to show that the right to the benefit which is sought to be computed must be an existing one, that is to say, already adjudicated upon or provided for and must arise in course of and in relation to the relationship between the workman and his employer. Applying the ratio of the decision to the facts of the present case, we find, that the right to the benefit of bonus was never adjudicated upon prior to taking recourse to the proceedings before the Labour Court and so also the other claim with regard to the differential house rent allowance. The latter claim stands, however, in a slightly different footing as the employees were getting house rent allowance at the rate of 12 1/2% of their basic pay which on being reduced to 7 1/2% in the year 1976 had given rise to their claim for higher house rent allowance. As to the claim for bonus, the Board has contended from the very beginning that it had never allowed bonus to any of its employees and that from the very nature of the undertaking the employees were not entitled to any bonus.
The other authorities relied upon by the Board, as referred to above also held that the matter covered by Section 10 of the I.D. Act cannot be decided by the Labour Court under Section 33-C(2), as the jurisdiction conferred on the Labour Court is in the nature of that of an executing Court, and that the foundation for the workmen's claim thereunder is the pre-existing entitlement to money or any benefit capable of computation in terms of money against the employer. The Labour Court of course has jurisdiction to go into incidental or ancillary matters having bearing on the question which it is called upon to decide, but this cannot extend to matters which lie within the domain of Industrial Tribunal upon reference under Section 10(1) of the Act.
7. Applying the legal perspective indicated above, it would be necessary to find out whether on the facts of the case the claim to bonus and differential house rent allowance can be said to be in the nature of industrial disputes, set out in Schedule-III of the I.D. Act, invoking jurisdiction of Section 10(1) of the Industrial Tribunal, or the matters are incidental or ancillary to the question of any existing right of the employees, which could appropriately be adjudicated upon by the Labour Court under Section 33-C(2) of the I.D. Act. It is well known that the provisions contained in the Bonus Act, namely, Section 1(3) of the Act deals with the applicability of the Act to different establishments, factories etc., while Section 32 of the Act deals with the classes of employees to whom the Bonus Act is not applicable and Section 22 takes the case for reference of disputes as an Industrial Dispute under the jurisdiction of I.D. Act. In the present set of cases, the stand of the Board from the very beginning was that it had never paid bonus to any of the employees, as it is exempt from such payment by virtue of the provision of Section 32(iv) read with Clause (v) (c) of the Act, being an establishment engaged in industries carried on by or under the authority of the Industries Department of the State Government. A perusal of the record would go to show that no evidence has been led in this respect as to the applicability of Section 32, 22 and 1(2) of the Bonus Act. No previous decision has been brought to the notice of the Labour Court to show either way if the employees of the Board were entitled to bonus as a condition of their service, or under the settlement or order or under the provisions of the Bonus Act. The only ground on which the Labour Court appears to have granted the relief is that there was some material, though very scanty and undependable, coming from the mouth of a witness, that the Board had in the past paid bonus to a few retrenched employees. There is no material however on record to show under what circumstance bonus, if any, was paid to those retrenched employees. That apart, the claim of the present employees to bonus was not in their capacity as retrenched employees, but as continuing in service and bonus is claimed as of right. A perusal of the order of the Labour Court would clearly indicate that there was absolutely no finding as to the entitlement of bonus to the employees of the Board as of right. No discussion was held on any of the provisions of the Bonus Act or about the exemption claimed by the Board under Section 32 of the Act. In such I view of the matter, it can safely be concluded that the order giving benefit of bonus as unpaid wages to the employees/petitioners was without any basis. It cannot be said on the materials on record that it was ancillary or incidental to the question, but it goes to the very root of the matter, and as such it is a matter coming within Schedule-III of I.D. Act and as such requires determination by the Industrial Tribunal as an industrial dispute in accordance with the provisions contained in the I.D. Act.
8. Coming to the question of differential house rent allowance it would be noticed that the stand of the Board was that the provisions of the Orissa Service Code is applicable to the 'employees of the Board under Clause 40 of the Regulations read with a few other Regulations like 41 to 43 and others. Clause 40 dealing with the general conditions of service says, inter alia, that the rules in the Orissa Service Code (Volume I) with all its appendices except 1 to 4, 8 and 12 as amended from time to time by the Government, shall apply to the employees of the Board mutatis mutandis The further contention is that the employees of the Board were being paid house rent allowance at the rate of 12 1/2% following the decision of the State Government as in F.D. Resolution as admissible to State Government employees. But consequent on pay revision in 1974, there was a change in the scale of house rent allowance to 7 1/2% and this was not being paid to the employees. Certain document, namely, the office order dated March 31, 1976 of the Board, has been filed on behalf of the Board in all the O.J.Cs. which contain the various F.D. Resolutions as also the decision of the Board. On a fair construction of these provisions of the Orissa Khadi and Village Industries Board Act, Rules and Regulations it would appear that the employees should ordinarily have no grievance when in consequence of their revision of pay scale in the year 1974, which they accepted by giving option, the reduction in the house rent allowance was affected. Another question, however, arises which is very strenuously urged by the learned counsel appearing for both parties. It is contended on behalf of the employees relying on Section 9-A of the I.D.Act that change in the house rent allowances being a change in the conditions of service applicable to workmen in respect of matters specified in the 4th Schedule, prior notice of the proposed change was mandatory. On behalf of the Board, it is contended relying on the proviso (b) to Section 9-A that the Board being governea by a set of rules, which follow the State Government Service Rules, should be exempted from the operation of Section 9-A of the I.D. Act. In otherwords, it is sought to be contended that no notice is necessary to be given by the Board before effecting any change in the house rent allowance; and it could unilaterally effect necessary changes. The 4th Schedule dealing with the conditions of service for change of which notice is to be given under Section 9-A includes wages, the period and mode of payment. There is no controversy that house rent allowance is included in "wages". The question as to whether notice under Section 9-A was necessary or not is a matter which never engaged the attention of the Labour Court, as would appear from the text of the orders. Without any discussion whatsoever, the Labour Court appears to have straightway jumped to the conclusion that the employees are entitled to differential house rent allowance, in asmuch as they have got a right to house rent allowance, which they were getting prior to the change in the scale. It is pertinent to mention that as contended by the Board, the question of wages including the period and mode of payment is a subject matter coming within the jurisdiction of the Industrial Tribunal, as provided for in the II. Schedule of the I.D. Act, and as such entertainable only by the Industrial Tribunal and not by the Labour Court.
9. From the foregoing discussions, it will be clear that both the questions of entitlement to bonus under the provisions of the Bonus Act as also the entitlement to House Rent Allowance are matters within the jurisdiction and competence of the Industrial Tribunal for adjudication, these being included in the III Schedule of the I.D. Act. The provisions of the I.D. Act elaborately makes provision as to how a matter would come before the Industrial Tribunal for adjudication. We need not, therefore, dilate on that matter. It would further appear from the foregoing discussions that the Labour Court has misdirected itself in coming to bold that the employees are entitled to bonus as part of their wages and that they are also entitled to differential house rent allowance. To repeat, we may say that the orders do not indicate as to from which materials such conclusions could be reached in view of the serious challenge made by the Board about the entitlement of the employees to the bonus and house rent allowance. The grounds for disentitlement as now contended before us, also appear to have been extended before the Labour Court transpiring from the written statement filed in each of the case. In the orders, there is absolutely no reference to the points of taw raised about the entitlement of the employees to both these claims. In such view of the matter, we are of considered view that the orders of the Labour Court suffer from serious infirmities for which these cannot be sustained. In the result, therefore, we quash the orders in each of these writ applications.
10. In view of our decision that the Labour Court was not competent to decide the question of the entitlement to bonus and differential house rent allowance by the employees for the reasons stated, and on our having quashed the orders on the grounds stated in the preceding paragraphs, we are of the opinion that the second and third contentions relating to the merits of the case, bearing on the questions of entitlement to bonus and house rent allowance do not merit any consideration by us in the present ceriorari proceedings. It is no doubt open to us to take a view and finally decide the question on merits, but this would, in our view, amount to usurping the jurisdiction of the Industrial Tribunal, which has been constituted by the I.D. Act to adjudicate upon the industrial disputes involving mixed questions of fact and law. The issues raised on behalf of the Board all involve mixed questions of fact and law. It is only on the determination of certain facts that the points of law canvassed on behalf of the Board can appropriately be decided. In such view of the matter, we would hold that the matters should be adjudicated upon and decided by the Industrial Tribunal and not by us.
The next reason which commends to us is that on a decision given by the Industrial Tribunal on the questions at issue, the losing party will get an opportunity to approach this Court in writ jurisdiction to challenge the decision of the Industrial Tribunal. Such privilege/advantage would be lost to the losing party if we, on very scanty factual materials on record, decide to take a decision on the merits of the case about the entitlement of the employees to bonus and differential house rent allowance. For these reasons we are of the considered view that it is the Industrial Tribunal who should decide the questions regarding entitlement to bonus and differential house rent allowance of the employees of the Board.
11. The question now arising for consideration is whether a direction can be given to the State Government to refer the disputes pertaining to bonus and house rent allowance for adjudication by the Industrial Tribunal. Provisions for reference of dispute to Tribunal are contained in Section 10(1)(d) of the I.D. Act, which is to the following effect:-
"Section 10(1) Where the appropriate Government is of opinion that any industrial dispute exists or is apprehended, it may, at any time, by order in writing, XX XX XX
(d) refer the dispute or any matter appearing to be connected with or relevant to, the dispute whether it relates to any matter specified in the Second Schedule or the Third Schedule to a Tribunal for adjudication."
No doubt on a reading of the provisions contained in Section 10 of the I.D. Act, it would appear to us that the question of reference of an industrial dispute lies at the discretion of the State Government. But on the peculiar/special facts and in the circumstances of the present set of cases, we have very little doubt in our mind that there does exist an industrial dispute between the Board and its employees in view of the claims made by the employees on one hand and the denial of the claim by the Board on the other on various factual and legal grounds. We, therefore, find it appropriate to give a direction to the State Government to take steps for reference of the present disputes to the Industrial Tribunal for adjudication in accordance with the provisions of law contained in the I.D. Act.
12. Before parting with the case, we make it clear that the Industrial Tribunal while dealing with the matters relating to bonus and house rent allowance would not be influenced by the observations made by us in this judgment.
13. With the aforesaid directions, the orders of the Labour Court in all the O.J.Cs. are hereby quashed. No costs.
D.P. Mohapatra, J.
14. I agree.