Gujarat High Court
Shroff Engineering Limited vs Ashwin Kiritkumar Pathak on 14 March, 2022
Author: A.Y. Kogje
Bench: A.Y. Kogje
C/SCA/20112/2017 JUDGMENT DATED: 14/03/2022
IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
R/SPECIAL CIVIL APPLICATION NO. 20112 of 2017
With
R/SPECIAL CIVIL APPLICATION NO. 21047 of 2017
With
R/SPECIAL CIVIL APPLICATION NO. 21069 of 2017
FOR APPROVAL AND SIGNATURE: Sd/
HONOURABLE MR. JUSTICE A.Y. KOGJE
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1 Whether Reporters of Local Papers may be allowed to see NO
the judgment ?
2 To be referred to the Reporter or not ? NO
3 Whether their Lordships wish to see the fair copy of the NO
judgment ?
4 Whether this case involves a substantial question of law as NO
to the interpretation of the Constitution of India or any
order made thereunder ?
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SHROFF ENGINEERING LIMITED & 1 other(s)
Versus
ASHWIN KIRITKUMAR PATHAK & 3 other(s)
=============================================
Appearance:
UTSAV P PARIKH(8223) for the Petitioner(s) No. 1,2
VIVAN T SHAH(7947) for the Petitioner(s) No. 1,2
MR RAJESH P MANKAD(2637) for the Respondent(s) No. 1
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CORAM:HONOURABLE MR. JUSTICE A.Y. KOGJE
Date : 14/03/2022
ORAL JUDGMENT
1. RULE. Learned Advocate Mr. Rajesh Mankad waives service of rule on behalf of the respondent No.1. Learned Senior Advocate Mr. G.M. Joshi Page 1 of 13 Downloaded on : Sat Dec 24 12:51:50 IST 2022 C/SCA/20112/2017 JUDGMENT DATED: 14/03/2022 with learned Advocate Dr. Venugopal Patel have appeared for the petitioner contractor and learned Advocate Mr.Utsav Parikh with learned Advocate Mr. Kunan Naik have appeared for the petitioner principal employer.
2. These group of petitions are arising out of the same facts and issues and between the same parties meaning thereby the employer on one side as the petitioner and workman as the respondents individually in each of the respective petitions of the group. Facts are recorded from the lead matter i.e. Special Civil Application No.20091 of 2017.
3. The petitions are challenging the order of the Labour Court dated 01 042017 passed in the respective Recovery Applications filed by the workman individually. The order of the Labour Court is the subject matter of challenge by the petitioners who are the principal employer and the Contractor through whom the respondent - workman was engaged. The respondent - workman had filed Recovery Application No.289 of 2008 before the Labour Court, wherein the workman had claimed Rs.1,12,029.70. By the impugned order dated 01042017, the Labour Court passed the order holding that workman is entitled to recover Rs.1,12,029.70 towards difference of Dearness Allowance from contractor and same is ordered to be paid with cost of Rs.500/ with further direction that if contractor fails to pay, workman would be entitled to recover from principal employer.
4. Against the order, the principal employer and the contractor have filed the present petitions.
5. Learned Advocate for the petitioners submitted that the petitioners had acquired the assets and liability of erstwhile S. J. Clear Water Pump Ltd. with effect from 01042006 and from time to time, the petitioner Company had engaged the various contractors for providing man power service. Workman filed application under Section33(C)(2) of the Industrial Disputes Act claiming recovery of the difference in accrued Dearness Allowance and actually paid to him as per the Minimum Page 2 of 13 Downloaded on : Sat Dec 24 12:51:50 IST 2022 C/SCA/20112/2017 JUDGMENT DATED: 14/03/2022 Wages Act and difference in bonus payment paid to him.
6. It is the case of the petitioners that from the documents which were placed before the Labour Court, relation of the workman that the petitioners and contractor was established on record, the workman had received wages, Dearness Allowance including bonus from the respective contractor as per the Minimum Wages rate applicable to Engineering Unit. The petitioners Company have also produced various documents to indicate that the workman had also placed his claim for the period during which the workman was not under the employment and oral evidence was also laid before the Labour Court, but Labour Court failed to take into consideration this aspect. It is submitted that the documents which were produced by the petitioners and contractor including the Identity Card, Wage Slip and Attendance Register, which the petitioners had maintained in conformity with the Labour Laws and if such evidence is produced, then claim made by the workman was falsified. However, the Labour Court has not taken into consideration this aspect at all.
7. It is submitted by learned Advocate for the petitioners that the Labour Court had exceeded its jurisdiction vested with it under Section33(C) (2) of the Industrial Disputes Act. Instead of taking into consideration the evidence laid by the petitioners and the contractor, the Labour Court had proceeded to accept the version of the workman as gospel truth and as if, there is no challenge to their version accepted the claim of the workman as the preexisting right, for which the application under Section33(C)(2) of the Industrial Disputes Act, could be maintained. It is submitted that in fact, the Labour Court had on its record, facts which were disputed and evidence laid by the petitioners as well as contractor to falsify the claim and therefore, it was incumbent for the Labour Court to treat it as the Industrial Disputes by permitting the parties to lead evidence and come to definite conclusion about the claim of the workman. Instead of, straightway the order has been Page 3 of 13 Downloaded on : Sat Dec 24 12:51:50 IST 2022 C/SCA/20112/2017 JUDGMENT DATED: 14/03/2022 passed under Section33(C)(2) of the Industrial Disputes Act, as if requirement of reference under Section10 of the Industrial Disputes Act stood concluded.
8. Learned Advocate for the petitioners submitted that the Labour Court had proceeded in mechanical manner by accepting the case of the workman that on each and every month, the workman has worked for 26 days and thereafter, considering the number of years that the workman was under employment, multiplied the same with difference and granted application. It is submitted that it was incumbent upon the Labour Court to take into consideration the evidence placed by the petitioners on record, which would go on to indicate that the workman has not actually worked for 26 days in all the months, during which the workman was under the employment.
9. Learned Advocate for the petitioners has drawn attention of this Court to the Schedule of the claim, which was placed along with application, wherein calculation clearly indicates that uniform application of 26 days per month is accepted by the Labour Court, despite there being evidence to the contrary. Learned Advocate for the petitioners has also drawn attention of this Court to various documents, which were exhibited before the Labour Court and placed at Annexures before this Court to indicate that the workman cannot be said to have worked for 26 days in a month year after year and for that purpose Pay Slip, Register of Attendance would go on to indicate the number of days attended by the workman being far less, then what is calculated by the workman in the schedule and accepted by the Labour Court.
10. Learned Advocate for the petitioners has thereafter relied upon the decision of the Apex Court in case of M/s. Bombay Chemical Industries v/s. Deputy Labour Commissioner and another passed in Civil Appeal No.813 of 2022 dated 04022022 on the issue of scope and ambit of the jurisdiction of the Labour Court under Section33(C) (2) of the Industrial Disputes Act. It is held that the benefits sought to Page 4 of 13 Downloaded on : Sat Dec 24 12:51:50 IST 2022 C/SCA/20112/2017 JUDGMENT DATED: 14/03/2022 be enforced under Section33(C)(2) of the Industrial Disputes Act is necessarily a preexisting benefit or one flowing from a preexisitng right.
11. Learned Advocate for the petitioners has then relied upon the decision of the Apex Court in case of State of U.P. and another v/s. Brijpal Singh reported in (2005) 8 SCC 58 to submit that power under Section33(C)(2) of the Industrial Disputes Act is to be exercised when the entitlement has been adjudicated or recognized by the employer. In another judgment of the Division Bench of this Court in case of Gujarat Water Supply and Sewerage Board and another v/s. Ketanbhai Dinkarray Pandya reported in (2003) 3 GLR 2281 to contend that the application for recovery can be entertained by the Labour Court, only if it is found by the Competent Authority that the workman is entitled to receive money or benefit, which is capable of being computed in terms of money from the employer.
12. As against this, learned Advocate for the respondents has submitted that the Labour Court was perfectly within its jurisdiction while passing the impugned order under Section33(C)(2) of the Industrial Disputes Act as the issue pertains to the entitlement with the Labour Court has decided based on the evidence available and with regards to the computation. It is only a matter of calculation and there is no requirement of any adjudication. When the workman are held to be entitled to minimum wages by treating the unit of the petitioners as Engineering Unit and the minimum wage applicable to Engineering Unit is ordered by the Labour Court as entitlement of the workman, then application under Section33(C)(2) of the Industrial Disputes Act is maintainable.
13. Therefore, contention of the petitioners regarding the period, number of days, workman has worked or the amount that has already been paid by the contractor under the head of minimum wage and difference if any, is only, cannot be accepted as if it is giving rise to Industrial Disputes Page 5 of 13 Downloaded on : Sat Dec 24 12:51:50 IST 2022 C/SCA/20112/2017 JUDGMENT DATED: 14/03/2022 and require adjudication under Section10 of the Industrial Disputes Act. Application made by the petitioners would clearly be covered under the jurisdiction of the Labour Court, while exercising jurisdiction under Section33(C)(2) of the Industrial Disputes Act.
14. Learned Advocate for the respondents has placed reliance upon the decision of the Division Bench of Kerala High Court in case of Pappu & another v/s. Raja Tile & Match Works reported in (1989) ILLJ 14 Ker to contend that while Section10 is intended to resolve the dispute regarding right asserted and the right disputed while Section33 is meant to settle the amount claimed under an existing right. According to learned Advocate for the respondents minimum wages as stipulated for Engineering firm is existing right and therefore, there is no scope for adjudication under Section10.
15. Having heard the rival submissions of the parties and having perused the documents on record, it appears that the respondentworkman have filed individually Recovery Application invoking Section33(C)(2) of the Industrial Disputes Act claiming the minimum wages, Dearness Allowance being declared every six months and payment of bonus as per the Payment of Bonus Act, 1965. From the application at Exh1, filed by the workman Sanat Rathva, it is contended that as the applicant was serving in the capacity of permanent worker and in a permanent production in the respondent no.1 - organization, and as the admissible benefits/facilities are not provided as per the provisions of the law, the applicant and coworkers gathered and joined unanimously the Gujarat Engineering and General Worker Union, Vadodara managed by AITUC. The applicant made representation before the union to get benefits/facilities admissible as per law such as pay as per minimum pay, pay as per dearness allowances declared every six months, bonus, Identity Card, Payslip, Attendance Card and the Union made complaint to the Government Labour Officer, Vadodara on 24/12/2007, wherein the Government Labour Officer has filed Criminal Cases against so Page 6 of 13 Downloaded on : Sat Dec 24 12:51:50 IST 2022 C/SCA/20112/2017 JUDGMENT DATED: 14/03/2022 called contractors for violation of various sections.
16. The respondent no.1 manufactures Submersible Pump and therefore, the workman is entitled for the minimum wages declared for the workers of 'Engineering Industries' as per the notification of the Labour and Employment Department, Secretariat, Gandhinagar under the Minimum Pay Act, 1948 and variable dearness allowances declared every six months in April and October by the government. As the petitioner no.1 and petitioner no.2 have not paid minimum pay and variable dearness allowances as per minimum wages to the workman, the workman has to file Recovery Application as per Section33(c)(2) of the Industrial Dispute Act, 1947. The Payment of Bonus Act, 1965 also applies to the petitioners organizations and therefore, as per the provisions of Section10 of the Payment of Bonus Act, 1965, minimum bonus of 8.33% is admissible, the petitioners have paid lumpsum amount of bonus for the year 20072008 and no minimum bonus has been paid for the previous years. As no minimum bonus for the service rendered is paid to workman, the Union made the complaint to the Bonus Inspector, Vadodara on 19/12/2007 and the Government Labour Officer, Vadodara has filed Criminal Case against the petitioners for the violation of Section10 of the Payment of Bonus Act, 1965 and at present, it is pending. The respondents have to file Recovery Application as per Section33(c)(2) of the Industrial Dispute Act, 1947 to get the amount of bonus as the respondent has paid less bonus of the previous years.
17. Along with the claim, the schedule was given for the calculation of the amount to be paid. In case of the workman Sanat Rathva, schedule submitted by along with the statement of the claim read as under:
Annexure "A" Grade:
Name: Sanat S. Rathva Designation: Helper
Page 7 of 13
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C/SCA/20112/2017 JUDGMENT DATED: 14/03/2022
From Date Salary received Admissible Pay and V.D.A. Total Due
To date (2) as per minimum wage Amount
(1) (3) (4)
01/05/2005 40.00 1526.20 6695.00
30/09/2005 x 26 852.80
1040.00 2379.00
x5 x5
5200.00 11895.00
01/10/2005 40.00 45.00 1526.20 7456.80
31/03/2006 x 26 x 26 821.60
1040.00 1170.00 2347.80
x 3 x3 x6
3120.00+3510.00=6630/ 14086.80
01/04/2006 45.00 1526.20 7597.20
30/09/2006 x 26 days 910.00
1170.00 2436.20
x 6 months x6
7020.00 14,617.20
01/10/2006 45.00 1526.20 2605.20
30/11/2006 x 26 946.40
1170.00 2472.60
x2 x2
2340.00 4945.20
01/05/2005 Bonus @ 8.33% on the salary 985.43
31/03/2006 received
11830.008.33%=985.43
01/04/2006 Bonus received 15156.008.33% 412.49
31/03/2007 850.00 =1262.49
25752.12
18. It appears that vide Exh4 and Exh6, the petitioner principal employer as well as contractor have submitted their respective reply. From the record of the case, it appears that along with the reply, certain documents were also produced before the Labour Court, which consisted of the Identity Card issued by the contractor, Pay Slip, which in the case of workman Sanat Rathva was exhibited by Exh11, 12 and
13. Perusal of the Exh11 would indicate the date of issue of the Identity Card is of 01122006, Wage Slip of September, 2008 at Exh12 indicated the number of working days to be 22 and half + 2 PL. Similarly, Pay Slip at Exh13 of April, 2007 indicated the number of Page 8 of 13 Downloaded on : Sat Dec 24 12:51:50 IST 2022 C/SCA/20112/2017 JUDGMENT DATED: 14/03/2022 days worked to be 22 + 3 - 1 = 24.9 days of working. If these documents are compared with the schedule placed by the workman along with his claim, then it would indicate that the workman is claiming difference of minimum wage for the period between 0105 2005 to 30092005, where there is no record of the workman having worked with the petitioners directly or indirectly. It is for the first time name of the workman has appeared in the Register of wages for the month of April, 2006 at Sr. No.18, which is produced at Page No.207 to the petition.
19. In the opinion of the Court, the petitioners were justified in challenging the version of the workman in its statement of claim more particularly when such challenge was made on the basis of the evidence placed before the Labour Court.
20. Therefore, in view of the aforesaid facts, in this case, it cannot be said that the claim made by the workman was pursuant to any adjudicatory process or based on any preexisting right. In fact, with the challenge made by the petitioners to the claim, the Court is of the view that before deciding such claim, adjudicatory process as contemplated under Section10 of the Industrial Disputes Act was essential.
21. Aforesaid discussion with regards to the evidence pertaining to in case of one of the workman is only to indicate that the dispute arose when the workman made claim under various head in his application purportedly under Section33(C)(2) of the Industrial Disputes Act and when such claims were countered by the petitioner principal employer as well as contractor on factual background.
22. This Court in case of Gujarat Water Supply and Sewerage Board and another (supra), has held in Para28 as under:
"28. Section 33C(2) of the I.D. Act makes it clear that where any workman is entitled to receive any amount or benefit which is capable of being computed in terms of money from his employer 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 subject to any Rules made under the Act Page 9 of 13 Downloaded on : Sat Dec 24 12:51:50 IST 2022 C/SCA/20112/2017 JUDGMENT DATED: 14/03/2022 the Labour Court has to decide such question within a period of 3 months which period may be extended by the Labour Court for the reasons recorded in writing if it is expedient so to do. Thus, it is clear that first and fundamental requirement under Section 33C(2) of the I.D. Act is that the Recovery Application can only be entertained by the Labour Court only if it is found by the competent authority that the workman is entitled to receive money or any benefit which is capable of being computed in terms of money from his employer. Meaning thereby, there should be prior adjudication by the competent authority or the Court. Admittedly, in the instant case there was no adjudication either by the competent authority or by the Court. In the instant case, the workmen could have claimed overtime wage by lodging their claims before the Workmen's Compensation Commission under Section 20 of the Minimum Wages Act, who could have decided the dispute between the parties after holding the enquiry and giving them opportunity of hearing. However, as per the proviso to Section 20 of the Minimum Wages Act the workman had to present such application within 6 months from the date on which the Minimum wages or other amount became payable. The authority had jurisdiction to entertain any Application filed after a period of limitation of 6 months provided sufficient cause was made out. Admittedly, in all these cases the claim of the workmen was timebarred as they were claiming overtime wages in 1995 for the period commencing from 1989 to 1992, therefore, they have not availed remedy under the provisions of the Minimum Wages Act. Still, they could have approached the Labour Court by way of reference under Section 10 of the I.D. Act, by raising dispute regarding overtime. Instead of that they approached the Labour Court straightaway by filing Recovery Applications under Section 33C(2) of the I.D. Act, without prior adjudication of their claim."
23. From the aforesaid, the Division Bench of this Court has held that the fundamental requirement under Section33(C)(2) of the Industrial Disputes Act has to be preceded with the findings by the competent Authority about the entitlement by the workman to receive money or benefit, which is capable of being computed in terms of money.
24. In case of Brijpal Singh (supra), the Apex Court has held in Para13 as under:
"13. Thus it is clear from the principle enunciated in the above decisions that the appropriate forum where question of back wages could be decided is only in a proceeding to whom a reference under Section 10 of the Act is made. Thereafter, the Labour Court, in the instant case, cannot arrogate to itself the functions of an Industrial Tribunal and entertain the claim made by the respondent herein which is not based Page 10 of 13 Downloaded on : Sat Dec 24 12:51:50 IST 2022 C/SCA/20112/2017 JUDGMENT DATED: 14/03/2022 on an existing right but which may appropriately be made the subject matter of an industrial dispute in a reference under Section 10 of the I.D. Act. Therefore, the Labour Court has no jurisdiction to adjudicate the claim made by the respondent herein under Section 33C(2) of the I.D. Act in an undetermined claim and until such adjudication is made by the appropriate forum, the respondentworkman cannot ask the Labour Court in an application under Section 33C(2) of the I.D. Act to disregard his dismissal as wrongful and on that basis to compute his wages. It is, therefore, impossible for us to accept the arguments of Mrs. Shymala Pappu that the respondentworkman can file application under Section 33C(2) for determination and payment of wages on the basis that he continues to be in service pursuant to the said order passed by the High Court in Writ Petition No. 15172 of 1987 dated 28.10.1987. The argument by the learned counsel for the workman has no force and is unacceptable. The Labour Court, in our opinion, has erred in allowing the application filed under Section 33C(2) of the I.D. Act and ordering payment of not only the salary but also bonus to the workman although he has not attended the office of the appellants after the stay order obtained by him. The Labour Court has committed a manifest error of law in passing the order in question which was rightly impugned before the High Court and erroneously dismissed by the High Court. The High Court has also equally committed a manifest error in not considering the scope of Section 33C(2) of the I.D. Act. We, therefore, have no hesitation in setting aside the order passed by the Labour Court in Misc. Case No. 11 of 1993 dated 23.8.1995 and the order dated 9.1.2002 passed by the High Court in C.M.W.P. No. 36406 of 1995 as illegal and uncalled for. We do so accordingly."
25. In the latest pronouncement by the Apex Court in case of M/s. Bombay Chemical Industries (supra), the Apex Court has examined the scope and ambit of jurisdiction of Labour Court under Section33(C)(2) of the Industrial Disputes Act. It was a case before the Apex Court where an application was filed before the Labour Court under Section33(C)(2) of the Industrial Disputes Act demanding the difference of wages for the period between 01042006 to 31032012, which claim was disputed by the employer by taking up a stand that workman was never engaged by the employer and had never worked in the establishment on the post of Salesman. After examining the facts, the Apex Court has held that it is a settled preposition of law in an application under Section33(C)(2) of the Industrial Disputes Act, has no jurisdiction to adjudicate the dispute of entitlement or basis of the claim of workman and it can only Page 11 of 13 Downloaded on : Sat Dec 24 12:51:50 IST 2022 C/SCA/20112/2017 JUDGMENT DATED: 14/03/2022 interpret the award or settlement or which claim is based, while exercising jurisdiction under Section33(C)(2) of the Industrial Disputes Act. In the facts of the case, the Apex Court has proceeded to held in Para7 as under:
"7. Applying the law laid down by this Court in the aforesaid decisions to the facts of the case on hand, when there was no prior adjudication on the issue whether respondent No.2 herein was in employment as a salesman as claimed by respondent No.2 herein and there was a serious dispute raised that respondent No.2 was never in employment as a salesman and the documents relied upon by respondent No.2 were seriously disputed by the appellant and it was the case on behalf of the appellant that those documents are forged and/or false, thereafter the Labour Court ought not to have proceeded further with the application under Section 33(C)(2) of the Industrial Disputes Act. The Labour Court ought to have relegated respondent No.2 to initiate appropriate proceedings by way of reference and get his right crystalized and/or adjudicate upon. Therefore, the order passed by the Labour Court was beyond the jurisdiction conferred under Section 33(C)(2) of the Industrial Disputes Act. The High Court has not appreciated the aforesaid facts and has confirmed the same without adverting to the scope and ambit of the jurisdiction of the Labour Court under Section 33(C)(2) of the Industrial Disputes Act."
26. Judgment relied upon by the learned Advocate for the respondents in case of Pappu & another (supra), the Court was examining the fact where the appellants had claimed bonus for the year 19781979 at a particular rate of the wage, which was declared by the employer. Bonus was paid deducting 7 days wages paid for national and festival holidays. The Labour Court had entertained such application under Section33(C) (2) of the Industrial Disputes Act, which was subject matter of challenge under Article226, where the Single Judge of the Court had allowed the writ petition, holding that the dispute was raised by the Management as Industrial Disputes under Section22 of the Payment of Bonus Act and therefore, matter could not be proceeded under Section33(C)(2) of the Industrial Disputes Act. The Division Bench had proceeded to hold that controversy before the Division Bench had raised two questions for Page 12 of 13 Downloaded on : Sat Dec 24 12:51:50 IST 2022 C/SCA/20112/2017 JUDGMENT DATED: 14/03/2022 determination as to whether Payment of Bonus Act excludes applicability of Section33(C)(2) of the Industrial Disputes Act and whether bonus disputes are covered by Section33(C)(2) of the Industrial Disputes Act. As the Court had proceeded to hold that the dispute regarding bonus was in a very narrow compass and in fact there was no dispute regarding the rate of bonus or applicability of Bonus Act to the Establishment and therefore, it was only an issue of computation and therefore, came to conclusion that application under Section33(C) (2) of the Industrial Disputes Act could be maintained in the facts of that case.
27. Aforesaid facts are quite difference from the facts of the present case, where the claim of the workman was seriously challenged and such challenge was not for the sake of challenge, but was based on sound contention backed with sufficient evidence, atleast to the extend that the claim made by the workman could not be covered under the definition of preexisting right or the settlement.
28. Section33(C)(2) of the Industrial Disputes Act begins with "where any workman is entitled to receive". Where entitlement is still in question, which in the facts of the present case, is raised by the employer, the same in the opinion of the Court will have to undergo an adjudicatory process.
29. In view of the aforesaid reasonings, the petitions deserve to be allowed to the aforesaid extent. The impugned order dated 01042017 passed in Recovery Application No.289 of 2008 is ordered to be quash and set aside. Rule is made absolute with no order as to costs. Direct service is permitted.
Sd/ (A.Y. KOGJE, J) PARESH SOMPURA Page 13 of 13 Downloaded on : Sat Dec 24 12:51:50 IST 2022