Calcutta High Court (Appellete Side)
Suresh Mahata & Ors vs The Chairman-Cum-Managing Director on 26 April, 2019
Author: Arijit Banerjee
Bench: Arijit Banerjee
In The High Court At Calcutta
Constitutional Writ Jurisdiction
Appellate Side
W.P 28555(W) of 2017
Suresh Mahata & Ors.
-Vs.-
The Chairman-cum-Managing Director, FCI & Ors.
Coram : The Hon'ble Justice Arijit Banerjee
For the petitioners : Mr. Partha Sarathi Sengupta, Sr. Adv.
Mr. Ambar Majumder,
Mr. Santanu Chakraborty.
For the FCI : Mr. Arunava Ghosh, Sr. Adv.
Mr. Kamal Kumar Chattopadhyay.
Heard On : 16/01/2019, 24/01/2019 & 15/02/2019.
Judgment On : 26/04/2019
Arijit Banerjee, J.
(1) The short facts of this case are that the petitioners claim that they are departmental workers working at different food storage depots of Food Corporation of India (in short FCI) situated in the State of West Bengal. They work as handling workers involved in handling of bags at these depots. They contend that apart from their regular monthly pay, they are also entitled to get incentive as per the circulars issued from time to time. 2 (2) In 1999, a bipartite settlement was arrived at between the FCI and the Union of the petitioners whereunder, inter alia, the piece rate incentive scheme was agreed to be revised. The petitioners started to get incentive as per the bipartite settlement.
(3) A circular dated 15 December, 2005 was issued by FCI to the prejudice of the petitioners bringing into operation a piece rate incentive scheme for handling of bags weighing up to 50 kg. by departmental workers in the inland depots of food of FCI. It is not in dispute that the incentive scheme sought to be introduced by the said circular dated 15 December, 2005 was challenged by the Union of the petitioners which gave rise to an industrial dispute before the Regional Labour Commissioner, (Central), New Delhi.
(4) A further Circular No. 5/2006 dated 20 February, 2006 was issued by FCI which was to the effect that "it has been decided by the Competent Authority that implementation of Circular No. 18/2005 dated 15 December, 2005 with regard to the payment of incentive wages as per the revised norms to the departmental workers be stayed till the dispute is pending before the RLC (C), New Delhi."
(5) The disputes between FCI and the Union of the petitioners were subsequently referred for adjudication to the Central Government Industrial Tribunal (CGIT)-cum-Labour Court, 1, New Delhi. The terms of reference was as follows:-
3
"Whether the demand of the union for withdrawing the new incentive scheme announced vide Circular No. 18/2005 dated 15/12/2005 is legal and justified? if not, to what relief is the workmen entitled?"
(6) It appears that the learned Tribunal vide its Award dated 5th July, 2016 held that "the demand of the FCI union for withdrawing the new incentive scheme announced vide Circular No. 18/2005 dated 15/12/2005 is neither legal nor justified under the law. Reference is answered accordingly ......".
(7) Subsequent to the publication of the said Award, FCI issued Circular No. 8/2016 dated 17 August, 2016, the material portion whereof reads as follows:-
"It is further stated that the instant award has become implementable as per the provisions of ID Act. The reference has been answered in favour of FCI and thus the circular No. 18 of 2005 is applicable w.e.f. 01.12.2005 in its letter and spirit. It is, therefore, requested that the calculation of incentive to be done strictly in terms of Circular No. 18 of 2005 with immediate effect and an action plan may be made as per the age provide of the departmental workers to make recovery of excess incentive wages paid for the handling 50 kg bags as per the instructions contained in Hqrs. Letter No. (31)/1998 dated 10.05.1999 vide which piece-rate incentive scheme for handling of bags weighing above 66 kg and below 66 kg by the Departmental Workers in inland godowns/depots was circulated. The workers of Borivili, Manmad, Panvel & Wandra of Maharashtra and Vishakapatnam of Andhra Pradesh had given an undertaking that in case the datum is revised to 135 bags then the excess amount will be refunded by the workers. Therefore recovery be made accordingly from them also and ATR be sent to this office."
(8) Aggrieved by the said circular, the petitioners have approached this Court by way of the present writ petition praying for, inter alia, orders 4 restraining the respondent authorities from recovering any amount from the petitioners paid as incentive in terms of the bipartite agreement dated 13 March, 1999. In other words, essentially the petitioners have challenged the FCI circular dated 17 August, 2016.
(9) Appearing for the petitioners, Mr. Partha Sarathi Sengupta, learned senior advocate submitted that the circular dated 17 August, 2016 (in short the impugned circular) was challenged by the FCI handling labourers working at various food storage depots in Bihar before the Patna High Court by way of several writ petitions. By a common judgment and order dated 18 May, 2018, the learned Single Judge quashed the impugned circular. This judgment and order was upheld by a Division Bench of the Patna High Court by its judgment and order dated 5 July, 2018. The Special Leave Petition preferred by FCI against the Division Bench judgment was dismissed by the Hon'ble Apex Court by its order dated 5 October, 2018. (10) Mr. Sengupta also drew my attention to a judgment and order dated 16 November, 2018 passed by a learned Judge of the Chhattisgarh High Court quashing the same impugned circular to the extent that it contemplated initiation of recovery proceedings against the petitioners. The learned Judge followed the decision of the Division Bench of the Patna High Court and held that judicial discipline and propriety demanded that the Chhattisgarh High Court also quashes the impugned circular to the extent indicated above.
(11) Mr. Sengupta submitted that Judicial comity warrants that the same order be passed by this Court. It cannot be that the impugned circular will 5 be inapplicable to the FCI handling labourers in Chhattisgarh and Bihar but will apply to the FCI handling labourers in the State of West Bengal. This will be totally arbitrary and violative of Article 14 of the Constitution of India.
(12) Learned senior counsel finally submitted that since FCI itself put in abeyance its Circular dated 15 December, 2005, by its Circular dated 20 February, 2006, the concerned workmen received incentive as per the scheme that was in operation prior to issuance of the Circular dated 15 December, 2005. It cannot be said that such payment to the workmen was wrongful or made under mistake. Hence, no recovery can be made from them of any incentive paid to them pursuant to the scheme that was in vogue prior to the Circular dated 15 December, 2005. (13) Appearing for FCI, Mr. Arunava Ghosh, learned senior counsel referred to Section 33 (1) of the Industrial Disputes Act, 1947 which reads as follows:-
"During the pendency of any conciliation proceeding before a conciliation officer or a Board or of any proceeding before an arbitrator or a Labour Court or Tribunal or National Tribunal in respect of an industrial dispute, no employer shall , -
(a) In regard to any matter connected with the dispute, alter, to the prejudice of the workmen concerned in such dispute, the conditions of service applicable to them immediately before the commencement of such proceeding; or
(b) For any misconduct connected with the dispute, discharge or punish, whether by dismissal or otherwise, any workmen concerned in such dispute, save with the express permission in writing of the authority before which the proceeding is pending."6
He submitted that in view of the aforesaid legal provision, the management had no choice but to issue the Circular dated 20 February, 2006 putting in abeyance the operation of the Circular of 2005. The management had no choice in the matter and did not do it voluntarily. (14) Mr. Ghosh then submitted that the award of the CGIT has not been set aside by any competent Forum. Hence, the same can be implemented. Therefore, recovery is permissible since the handling labourers were conscious of excess payment.
(15) Regarding dismissal of the Special Leave Petition by the Supreme Court which was preferred by FCI against the Division Bench judgment and order of the Patna High Court, learned senior counsel submitted that denial of special leave does not mean that the impugned judgment is affirmed on merits. In this connection, he referred to the following three decisions of the Hon'ble Supreme Court:-
(i) (2000) 6 SCC 359. (Kunhayammed and others versus State of Kerala and Another).
(ii) (2010) (8) SCALE 363. (Bhakra Beas Management Board versus Krishan Kumar Vij and another).
(iii) (1986) 4 SCC 146. (Indian Oil Corporation Limited versus State of Bihar and others).
(16) Mr. Ghosh further submitted that FCI has filed a petition for review of the Division Bench judgment and order which is pending disposal. FCI also 7 proposes to file an appeal against the judgment and order of the learned Single Judge of the Chhattisgarh High Court.
(17) Mr. Ghosh then referred to the decision of the Hon'ble Supreme Court in the case of State of Punjab versus Rafiq Masih reported in AIR 2015 SC 696, wherein at Paragraph 12 the Hon'ble Supreme Court indicated the situations in which excess payment mistakenly made by the employer to the employees cannot be recovered. He submitted that the petitioners are not employees belonging to Class - III and Class - IV service (or Group 'C' and Group 'D' service). Further recovery not in excess of five years is permissible. He further submitted that the Supreme Court in the case of Rafiq Masih did not consider its earlier decision in the case of Chandi Prasad Uniyal versus State of Uttarakhand reported in AIR 2012 SC 2951, wherein a Coordinate Bench of the Supreme Court held that except in few instances pointed out in the cases of Syed Abdul Qadir (2009 AIR SCW 1871) and Col. B.J. Akkara (2006 AIR SCW 5252), excess payment made due to wrong/irregular pay fixation can always be recovered. He submitted that the decision of the Coordinate Bench in the case of Chandi Prasad Uniyal will prevail over the decision in the case of Rafiq Masih. (18) In reply, Mr. Sengupta, learned senior counsel conceded the point that the doctrine of merger has no application when a Special Leave Petition is simply dismissed. However, two High Courts have taken a view and Judicial comity warrants that the same view be taken by this Court. He further referred to Section 33(1) of the Industrial Disputes Act, 1947 and submitted that it operates as a statutory injunction. Without express permission in 8 writing of the tribunal, FCI could not have given effect to the 2005 Notification. Hence, FCI put the operation of the notification in abeyance.
He submitted that permission grant be retrospective. Permission is different from approval.
(19) As regards, review of the Patna Division Bench judgment, Mr. Sengupta submitted that once Special Leave Petition against a Division Bench order has been dismissed, no review of such order before the High Court will lie. In this connection, he relied on the decisions in the cases of Abbai Maligai Partnership Firm and another Versus K. Santhakumaran and others reported in (1998) 7 SCC 386 and West Bengal Dairy & Poultry Development Corporation Ltd. Versus Senior Regional Manager, FCI reported in 2009 (4) CHN 288.
Court's View:-
(20) I have given anxious consideration to the rival contentions of the parties. I am inclined to allow this application for the reasons stated hereinafter.
(21) The circular impugned herein was challenged before the Patna High Court. The Division Bench of the Patna High Court upheld the learned Single Judge's order quashing the impugned circular. The Hon'ble Supreme Court dismissed the Special Leave Petition against the Division Bench judgment and order. I understand that the review petition filed by FCI before the Hon'ble Supreme Court has also been dismissed by an order dated 26 March, 2019. Following the judgment of the Patna High Court, the 9 Chhattisgarh High Court has also set aside the same circular which is impugned in this writ application to the extent it contemplated recovery from the handling labourers. I agree with Mr. Sengupta, learned senior counsel that Judicial comity, discipline and propriety warrant that the same order be passed by this Court unless, of course, I have valid reasons to differ from the view taken by the Patna and the Chhattisgarh High Courts. I have gone through the judgments of the Patna and the Chhattisgarh High Courts and with due respect, I completely agree with the reasoning and conclusion thereof. I have no reason to differ from the view taken in the said judgments. I am also of the view that the impugned circular is liable to be quashed. A situation cannot be countenanced where the impugned circular will not operate in respect of the FCI handlours Bihar and Chhattisgarh but will operate in West Bengal.
(22) This is not a case where the handlers were paid excess money because of wrong pay fixation or by mistake. FCI itself suspended the operation of the circular dated 15 December, 2005 pending resolution of the dispute between FCI and the handler's union. Indeed, FCI was bound to do so in terms of Section 33 (1) of the Industrial Disputes Act, 1947. As a result, the handlers received payment in terms of the agreement between the parties that was in vogue prior to the publication of the circular dated 15 December, 2005. It cannot be said that this payment was made under mistake or due to bona fide wrong pay fixation. Hence, in my considered view the ratio of Chandi Prasad Uniyal (supra) would not apply to the facts of this case. 10 (23) In my opinion, the ratio of Rafiq Masih (supra) will squarely apply to the facts of this case as was also the view of the Patna High Court and the Chhattisgarh High Court. Paragraph 12 of the judgment in Rafiq Masih's case reads as follows:-
"12. It is not possible to postulate all situations of hardship, which would govern employees on the issue of recovery, where payments have mistakenly been made by the employer, in excess of their entitlement. Be that as it may, based on the decisions referred to herein above, we may, as a ready reference, summarise the following few situations, wherein recoveries by the employers, would be impermissible in law:
(i) Recovery from employees belonging to Class-III and Class-IV service (or Group 'C' and Group 'D' service).
(ii) Recovery from retired employees, or employees who are due to retire within one year, of the order of recovery.
(iii) Recovery from employees, when the excess payment has been made for a period in excess of five years, before the order of recovery is issued.
(iv) Recovery in cases where an employee has wrongfully been required to discharge duties of a higher post, and has been paid accordingly, even though he should have rightfully been required to work against an inferior post.
(v) In any other case, where the Court arrives at the conclusion, that recovery if made from the employee, would be iniquitous or harsh or arbitrary to such an extent, as would far outweigh the equitable balance of the employer's right to recover."
(24) Although, learned counsel for FCI submitted that the petitioners do not belong to Class - III or Class - IV staff, the same does not appear to be correct. Mr. Sengupta, learned senior counsel has drawn my attention to a circular dated 11 August, 2011 issued by FCI (Annexure A-14, Page 49 of Affidavit-in-Reply) wherefrom it is clear that the petitioners belong to Class - III and Class - IV staff. In that view of the matter, recovery of excess money 11 paid to them not under any bona fide mistake or due to wrong pay fixation nor due to any fault on the part of the petitioners, cannot be made by FCI. The excess payment if any, was not induced by any fraud or misrepresentation on the part of the petitioners and the petitioners had no role to play in the same. It will be highly inequitable and harsh on the petitioners if FCI is permitted to recover such excess payment, if any, after passage of so many years.
(25) Mr. Ghosh, learned senior counsel submitted that the Award of the Tribunal still stands and can be implemented by FCI. Mr. Sengupta, learned senior counsel for the petitioners has submitted that the Award is under challenge before the Delhi High Court. Be that as it may, the award does not authorise FCI to recover any alleged excess payment made to the petitioners between 15 December, 2005 and the date of the Award. Even if the Award survives the challenge, in my view, it can only be given prospective effect. In other words, the 15 December, 2005 circular can be given only prospective effect. Section 33 (1) of the Industrial Disputes Act, 1947 mandates that during the pendency of any proceeding contemplated therein the conditions of service applicable to the workmen immediately before the commencement of such proceeding would not be altered to the prejudice of the workmen without the express permission in writing of the authority before which the proceeding is pending. It may be noted that the word is permission and not approval. Permission by its nature has only prospective effect. One cannot do something and then seek permission to do it. In contradistinction, approval may have retrospective effect. Approval 12 may legalise or regularise an Act already done unless prior to approval is mandated by any law. The effect of the Tribunal's award was to permit FCI to make operational the circular dated 15 December, 2005. Such permission can operate only from the date of the Award. Hence, excess payment if any, made by FCI in terms of the arrangement prevailing prior to introduction of the circular dated 15 December, 2005, cannot be sought to be recovered.
(26) In view of the aforesaid, the impugned circular dated 17 August, 2016 is quashed. No recovery can be made from the petitioners of the alleged excess payment made in terms of the arrangement that was in vogue prior to introduction of the circular dated 15 December, 2005. Further the circular dated 15 December, 2005 cannot be given effect to for any period prior to 5 July, 2016 when the Tribunal's Award was published, in the event, the Award is ultimately upheld.
(27) W.P 28555 (W) of 2017 is accordingly disposed of. There will be no order as to costs.
(28) Urgent Photostat certified copy of this judgment shall be given to the parties, if applied for, upon compliance with requisite formalities.
(Arijit Banerjee, J.)