Kerala High Court
Commandant, Defence Security vs Secretary, N.C.C.G.U.E. Assn. on 11 April, 2001
Equivalent citations: [2001(90)FLR435], (2001)IILLJ1170KER
Author: Kurian Joseph
Bench: Kurian Joseph
JUDGMENT Kurian Joseph, J.
1. The scope of S.17-B of the Industrial Disputes Act, 1947 (hereinafter referred to as 'the Act') arises for consideration in this appeal. The appeal is at the instance of the petitioner in O.P. No. 29835 of 1999 and it is preferred against an order dated 6.11.2000 in C.M.P. No. 12425 of 2000 in O.P. No. 29835 of 1999 directing payment of last drawn wages to the respondents workmen under S.17-B of the Act. The Original Petition is filed challenging Ext. P13 award passed by the Labour Court, Calicut. The operative portion of the said award reads as follows:
"18. In the result, an award is passed holding that the termination of the service of the workers including that of Mrs. Geetha Ashok is unjustified. The management shall reinstate them in service with continuity of service and other attendant benefits within one month from the date of publication of this award in the official gazette. They are entitled to backwages from the date of termination of their service till reinstatement at the rate of last drawn wages. The management shall pay the arrears of wages within one month from the date of publication of this award in the official gazette failing which the workers are entitled to interest at the rate of 12% per annum from this date till realisation."
2. The Original Petition was admitted on 29.11.1999. Thereafter the above C.M.P. was filed by the first respondent Association seeking last drawn wages in respect of nine workmen. The application was resisted by the petitioner on the ground that the persons mentioned in the affidavit for whom backwages are claimed are actually not workmen and that the establishment where such reinstatement is ordered is not an industry. However, the workmen contended that those are all matters outside the purview of consideration under S.17-B of the Act and that once proceedings challenging an award is pending in the High Court or the Supreme Court the workmen are entitled for backwages. The learned Single Judge allowed the petition and hence this appeal.
3. Sri. C.N. Radhakrishnan, Special Counsel to the Government of India, appearing on behalf of the appellant submitted before us that while giving a literal meaning and interpretation to S.17-B of the Act the learned Single Judge failed to appreciate that the power of the High Court under Art. 226 of the Constitution of India is not inhibited by the provisions of S.17-B of the Act and a departure can be made in rare cases where it is shown that the award is made without jurisdiction or is otherwise a nullity. The counsel placed reliance on a Full Bench decision of the Madras High Court reported in Godrej & Boyce Mfg. Co. v. Pr. Lab. Court, Madras & Anr., 1992 (2) LLJ 201.
4. Before proceeding to analyse the contention of the learned counsel it is necessary to understand the true meaning and the legislative intend behind S.17-B of the Act, which was introduced by way of an amendment to the Act in 1984. S.17-B of the Act reads as follows:
"17B. Payment of full wages to workman pending proceedings in higher courts.
Where in any case, a Labour Court, Tribunal or National Tribunal by its award directs reinstatement of any workman and the employer prefers any proceedings against such award in a High Court or the Supreme Court, the employer shall be liable to pay such workman, during the period of pendency of such proceedings in the High Court or the Supreme Court, full wages last drawn by him, inclusive of any maintenance allowance admissible to him under any rule if the workman had not been employed in any establishment during such period and an affidavit by such workman had bene filed to that effect in such court:
Provided that where it is proved to the satisfaction of the High Court or the Supreme Court that such workman had been employed and had been receiving adequate remuneration during any such period or part thereof the court shall order that no wages shall be payable under this section for such period or part, as the case may be."
The objects and reasons in introducing S.17-B of the Act are as follows:
.....When Labour Courts pass awards of reinstatement, these are often contested by an employer in the Supreme Court and High Courts. It was felt that the delay in the implementation of the award causes hardship to the workman concerned. It was, therefore, proposed to provide the payment of wages last drawn by the workman concerned, under certain conditions, from the date of the award till the case is finally decided in the Supreme Court or High Court."
Though what is stated in the objects and reasons is the provision for payment of wages last drawn by the workman concerned from the date of the award till the case is finally decided in the Supreme Court or High Court, what is actually provided under S.17-B is only payment of wages last drawn during the pendency of the proceedings in the High Court or the Supreme Court.
5. On a reading of S.17-B of the Act it can be seen that the provision can be invoked on satisfying the following conditions:-
(i) there must be an award by the Labour Court or the Tribunal directing reinstatement of the workman,
(ii) the challenge against the award should be pending before the High Court or the Supreme Court,
(iii) the workman had not been gainfully employed in any establishment during the pendency of the challenge in the High Court or the Supreme Court, and
(iv) there is an affidavit by the workman that he is not employed in any establishment receiving adequate remuneration during the pendency of the challenge in the High Court or the Supreme Court.
Once these conditions are satisfied, according to us, it is mandatory that the employer makes payment of last drawn wages to the workman during the pendency of the proceedings challenging the award is pending before the High Court or the Supreme Court. However, we find a contrary view in the decision of the Full Bench of the Madras High Court reported in 1992 (2) LLJ 201 wherein it is held as follows:
"11. Consensus of judicial opinion is that there is no vice in the rule enshrined in S.17B of the Act inasmuch as it is not unconstitutional and although it does not infringe or makes inroad in any manner into this Court's power under Art. 226 of the Constitution of India, it creates a liability upon the employer and conversely, a right in the workman to pay and receive wages last drawn by him inclusive of any maintenance allowance admissible to him under any rule during the period of pendency of the proceedings in the Court with the exception that if during this period or any part thereof he was gainfully employed elsewhere, he would not be entitled to such wages for the period of gainful employment. In Chitram & Co. Ltd. case (supra), it has been rightly stated by a Division Bench of this Court that S.17B cannot be construed as in any manner taking away or fettering the plenary powers of the High Court under Art. 226 and 227 of the Constitution of India, to make appropriate orders taking note of the relevant facts. That appropriate order will invariably be to the aid of the workman for payment of full wages pending proceedings in the Court unless the award is demonstrated to be a nullity or made without jurisdiction. The unfettered power of the Court under Art. 226 of the Constitution cannot be used to destroy the statutory right granted to a workman under S.17B of the Act, i.e., a right pendente lite which has been recognised, as we have seen, to remove the hardship and to protect the interests of the workman. The workman cannot be left uncared to suffer a total deprivation of wages merely because the employer has chosen and accordingly initiated a proceeding under Arts. 226 and 136 of the Constitution of India. This beneficial legislation that operates within a limited sphere is subject to conditions laid down by the section itself and that the section nowhere lays down that in extreme cases where it is demonstrated that the award passed is either without jurisdiction or is otherwise a nullity the High Court or the Supreme Court is debarred from exercising its powers under Arts. 226 and 136 of the Constitution.
12. Before we conclude and answer the reference, we feel constrained to observe that any challenge to the award on the ground that it is without jurisdiction or is otherwise a nullity alone will not be sufficient to suspend the operation of S.17B of the Act. The final adjudication in a case where the award is without jurisdiction or is otherwise a nullity shall ordinarily meet the ends of justice. The workman who shall be waiting for the implementation of the award during the pendency of the proceedings, however, shall receive only the wages at the rate last paid for the period of the pendency of the proceedings in the Court. It is not a burden of any serious consequence upon the employer, but will be a deprivation of a sort which may cause havoc to the workman and his family. If we proceed on the footing that the Court's power to make the final order includes the power to make an interim order, then we may say, the power will extend to suspending the liability of the employer under S.17B of the Act and accordingly the right of the workman to receive wages pendente lite. But, this will be possible in the rarest of the rare cases. Otherwise, it will defeat the very purpose for which this section has been introduction in the Act. There shall be any number of employers/managements, who shall successfully contrive petitions and proceedings challenging the award on some such grounds as the award being without jurisdiction or a nullity. Courts cannot afford to be manipulated and allow the management/employer to use the interim order as a weapon to avoid such a statutory liability. Some error of fact or even some error of law alone will not thus be enough to issue any interim order. If, however, the error is such that goes to the root of the jurisdiction of the Tribunal and the Court got sufficient materials to ignore the effect of S.17B of the Act, the Court may decline to order payment of the wages pendente lite.
6. With great respect we are unable to agree with the said proposition. As held by the Supreme Court in Bharat Singh v. Management of New Delhi Tuberculosis Centre, 1986 (2) LLJ 217, S.17B gives a mandate to the courts to award wages if the conditions in the section are satisfied. After all it is the duty of the court to administer justice according to law. Law being what is stated in S.17B, the duty of the court is only to order accordingly. Of course, it is open to a person to challenge the provision on the ground that the law is not according to justice. But such a challenge is not in the instant case or in the case before the Full Bench of the Madras High Court.
7. A Division Bench of the Bombay High Court also in Elpro International Ltd. v. K.B. Joshi & Ors., (1987 (2) LLJ 210) has also taken a similar view at paragraph 8 of the said decision which reads as follows:
".....Section nowhere lays down that in extreme cases where it is demonstrated that the award passed is either without jurisdiction or is otherwise a nullity, or grossly erroneous or perverse, the High Court or the Supreme Court is debarred from exercising its powers under Arts. 226 and 136 of the Constitution. Therefore, it is not possible for us to accept the contention that S.17B is void as it encroaches upon or overrides the powers of the High Court or the Supreme Court of India under Arts. 226 and 136 of the Constitution of India. The powers of the High Courts or the Supreme Court under Arts. 226 and 136 of the Constitution are paramount and S.17B does not interfere nor restrict the said Constitution powers".
8. We also find a similar view taken by the High Court of Andhra Pradesh in the decision reported in Large-sized Co-op. Credit Society v. Lab. Court and Anr., 1997 (2) LLJ 442, wherein it is held as follows:
"Though S.17B wages is the normal rule, in exceptional cases when award is perverse or erroneous or patently without jurisdiction or nullity, this Court acting under Art. 226 is not debarred from exercising its powers and pass appropriate orders on the petition seeking suspension of the operation of the award".
With great respect we are unable to agree with the views of the Madras, Bombay and Andhra Pradesh High Courts. As can be seen from the very object of the provision it is meant to be int eh nature of a subsistence allowance. It may be seen that even if ultimately the Writ Petition challenging the award is set aside, the workman is not liable to refund the wages he received during the pendency of the proceedings challenging the award. It has also to be noted that the payment of wages under S.17-B is not a condition precedent for suspension of the operation or stay of the implementation of the award passed by the Labour Court. Even in cases where the employer has not prayed for staying the award, the High Court or the Supreme Court has to direct payment of wages under S.17B of the Act as a condition precedent for the pendency of the proceedings.
9. It is profitable in this context to refer to a Bench decision of this Court reported in K. Bhaskaran v. R. Janardhanan Pillai, 1990 (1) LLJ 484. That was a case where the employer pleaded that the establishment had been closed and hence he was not bound to pay the wages under S.17-B of the Act during the pendency of the proceedings before Court. The Bench took the view that the only conditions for satisfying the direction to make payment of last drawn wages under S.17-B of the Act are those mentioned in paragraph 5 of this judgement and nothing more. In the words of Malimath, C.J.:
"No other condition is required to be satisfied for attracting liability under S.17-B. Therefore, the question as to whether the industry is in operation or has been closed down is not relevant for the purpose of S.17-B of the Act".
The question again came up for consideration before another Bench of this Court in the decision reported in Jayaraman v. Quilon Gas Service, 1995 (1) KLT 633, wherein it was held that once the conditions mentioned above are satisfied the workman is entitled to draw the last drawn wages under S.17-B of the Act. In the said decision the Court considered the question as to whether a workman could be denied wages in case he was employed and getting some remuneration. It was clearly held that it is not enough that any remuneration is received so as to deny the benefit of S.17-B of the Act, it should be satisfied that adequate remuneration is received by the workman while employed under any establishment. In the words of Pareed Pillay, C.J.:
"....Workman who was engaged in any activity or in some avocation to eke out a livelihood, so long it is not employment under any establishment cannot be denied of the benefit. To deny the benefit it must certainly be established that he was gainfully employed in some establishment during the pendency of the proceedings before the High Court or the Supreme Court and during that period he was receiving adequate remuneration".
10. The true intent and purport of the provision under S.17-B of the Act came up for consideration before the Apex Court in the decision reported in Dena Bank v. Kiritikumar T. Patel, AIR 1998 SC 511. On the issue as to whether a workman is liable to refund the wages he received during the pendency of the proceedings in the High Court or the Supreme Court when ultimately the decision is against him it was held as follows at paragraph 20:
".....The payment which is required to be the employer to the workman is in the nature of subsistence allowance which would not be refundable or recoverable from the workman even if the award is set aside by the High Court or this Court......"
Regarding the power of the High Court and the Supreme Court respectively, under Arts. 226 and 136 of the Constitution of India, in unambiguous terms it has been held as follows at paragraph 22:
".....But we are unable to agree with the view of the Bombay High Court in Elpro International Ltd. (1987 Lab. IC 1468 = 1987 (2) LLJ 210) supra that in exercise of the power under Arts. 226 and 136 of the Constitution an order can be passed denying the workman the benefit granted under S.17B. The conferment of such a right under S.17-B cannot be regarded as a restriction on the powers of the High Court or the Supreme Court under Arts. 226 and 136 of the Constitution.".
11. It is significant in this context to note that in the above case the Supreme Court was of the view that the High Court and the Supreme Court were well within their powers in passing an order in appropriate cases directing payment of a higher amount to the workman if such a higher amount is considered necessary in the interests of justice. However, it was made clear that in such circumstances the court should make appropriate provisions regarding refund or recovery of the excess amount in the event of the award being set aside ultimately. However, the expression full wages last drawn according to the Apex Court had to be understood in the plain and literal meaning. It cannot be taken as full wages which would have been drawn. In other words, the full wages last drawn would only mean the wages drawn at the time of termination of the workman. When in the interests of justice it is even permissible to direct payment of amounts more than those prescribed under S.17-B of the Act, it will be doing injustice to the workman if the law is narrowly interpreted in terms of the power of the High Court under Art. 226 or that of the Supreme Court under Art. 136 of the Constitution. The power is to be exercised to promote justice for whom the legislation is intended and not to deny justice to the beneficiary. In the words of Khalid, J. in Bharat Singh's case supra:
"11. In interpretation of statutes, Courts have steered clear of the rigid stand of looking into the words of the Selection alone but have attempted to make the object to the enactment effective and to render its benefits to the person in whose favour it is made. The legislators are entrusted with the task of only making laws. Interpretation has to come from the Court......"
In such circumstances we have no hesitation to hold that the view of the Full Bench of the Madras High Court and that of the Single Judge in the Andhra Pradesh High Court are no more good law. The decision of the Bombay High Court as already seen above had been overruled by the Supreme Court in Dena Bank's case. In a recent decision reported in Ch. Saraiah v. Executive Engineer, (1999)9 SCC 229 it was held as follows:
"3. Having examined the provisions of S.17-B of the Industrial Disputes Act, we are of the considered view that the Court has no jurisdiction to direct non-compliance with the same when the condition precedent for passing an order in terms of S.17-B of the Act is satisfied and this being the legislative mandate, the Division Bench of the High Court committed serious error in interfering with the direction of the learned Single Judge......"
12. To sum up:
(i) When the conditions under S.17-B of the Act are satisfied it is mandatory that the High Court or the Supreme Court directs payment of last drawn wages to the workman during the pendency of the proceedings challenging the award for reinstatement before the said courts.
(ii) The wages thus paid is in the nature of subsistence allowance and it is not refundable even if ultimately the award is set aside by the court.
(iii) But it is open to the High Court or the Supreme Court to order payment of a higher amount than the last drawn wages to the workman if such higher amount is considered necessary in the interests of justice; however, in such circumstances appropriate directions should be issued regarding refund or recovery of the excess amount in the event of the award being set aside.
(iv) The workman is entitled to receive the last drawn wages during the pendency of the proceedings challenging the award in the High Court or the Supreme Court even if the establishment had been closed during the period of the pendency of the proceedings.
(v) Merely because a workman is engaged in some activity or in some avocation to eke out his livelihood the benefit under S.17-B of the Act cannot be denied. Such denial is possible only if it is proved that the workman is gainfully employed in some establishment receiving adequate remuneration during the pendency of the proceedings before the High Court or the Supreme Court.
(vi) The direct for payment of last drawn wages has to be issued even if the employer has not prayed for staying the operation of the award; that is a condition precedent, once the other conditions are satisfied, for the pendency of the proceedings challenging the award before the High Court or the Supreme Court. Thus even if the award is not stayed but the Writ Petition challenging the award is admitted, during the pendency of the said proceedings the workman is entitled to receive the last drawn wages during the pendency of the proceedings.
(vii) The entitlement of the workman to receive last drawn wages is only during the pendency of the challenge of the award before the High Court or the Supreme Court and not from the date of the award.
(viii) The expression 'full wages last drawn' means the wages which were drawn by the workman at the time of termination of service and not the wages which would have been drawn by the workman if he had continued in service.
13. Legal position being what is stated above we may observe that it would be advisable for the legislature to prescribe for a time limit for payment of the last drawn wages as otherwise sometimes the workman may not be interested for the disposal of the proceedings before the High Court or the Supreme Court since he could comfortably receive wages without work; and it is for the courts also to take up such cases for final disposal on priority basis.
In the above circumstances we do not find any merit in the Writ Appeal and the same is accordingly dismissed.