Karnataka High Court
Sri Siddartha Educational Society, By ... vs Tumkur District Technical ... on 27 November, 2002
Equivalent citations: 2003 LAB IC (NOC) 232 (KAR), 2003 AIR - KANT. H. C. R. 1065, (2003) 98 FACLR 163, (2003) 103 FJR 630
Author: N. Kumar
Bench: N. Kumar
ORDER Kumar, J.
1. The petitioner has challenged in this Writ Petition the award of the Labour Court, Bangalore, dated 2.12.1994 passed in Reference No. 11/90 holding that the respondents are entitled to pay and allowances in the regular time scale pay from the date on which they completed one year of service in the second party management from the date of initial appointment and that they are entitled to receive DA, CCA, HRA and other allowances on par with non-teaching staff of Government Technical Institution and directing the petitioner to pay the same.
2. The aforesaid award came to be passed on a reference made by the Government of Karnataka under Section 10(1)(c) of the Industrial Disputes Act, 1947. The dispute which was referred for adjudication was as under: -
"(1) Whether the demand of the non-teaching employees of Sri Siddartha Institute of Technology, Tumkur, for revision of payscales, CCA, interim allowance, pay and other allowances, on par with the pay scales, CCA and other allowances paid to the non-teaching staff in Government Technical Institutions from the year 1979 is justified?
(2) If not, what is the relief to which these employees are entitled to?
3. Substantiating their claim the first respondent filed their claim statement as under: -
The first respondent is registered trade union and non-teaching staff of the petitioner are its members. The petitioner institution was established in the year 1979 and is affiliated to Bangalore University and is located in the outskirts of the city of Tumkur in a vast area of 65 acres and it is also recognized by the Institution of Engineers, India, and is getting all kinds of aids from the Government. 43 members mentioned in the claim petition joined the services of the petitioner as non-teaching staff from the dates shown against their names. They are entitled to receive wages, DA and all other allowances and benefits like HRA, CCA new pay scales, increments, washing allowance, interim relief, etc., on par with the employees working in Government technical institutions as per various Government notification published by the Government on different dates, from the dates of their appointment which is not extended to them. The petitioner paid not only less wages to these employees but also fixed their salaries unilaterally according to their whims and fancies. Hence, the employees are entitled to get their arrears from the management as shown against their names. They also claimed interest at 25% p.a. on the amounts due. They claimed a sum of Rs. 9,17,424.35 as the balance amount due to the 42 workmen for the period between 1979-88. They have set out in the claim statement the names of the employees, their designation, date of joining the duty and the balance amount due to each of them. The petitioner had issued individual appointment orders to the majority of the workmen at the time of recruitment fixing up the suitable scales and grades agreeing to pay all other admissible allowances as per Government of Karnataka pay scales. Therefore, they prayed for a direction to the second party workmen to pay wages, DA, washing allowance, HRA, CCA, new pay scales, increments, interim relief, etc., to them on par with the Government scales prescribed from time to time to the non-teaching staff of employees of Government technical institutions.
4. The petitioner has filed their counter statement opposing the said claim. It is contended by them that the petitioner Sri Siddartha Institute of Technology is established by Sri Siddartha Education Society, a body registered under the Societies Registration Act. Siddartha Institute of Technology is an unaided institution. The society is a social service organization established for the purpose of imparting education in rural area. It is not a productive oriented or profit oriented organization. The main object was to impart education to Scheduled Castes and Scheduled Tribes and the said institution is run by members belonging to that class. It is not an industry as defined under the Act.
5. They specifically contended that the instructors and library assistants whose names are mentioned at SI. Nos. 2, 6, 14, 17, 18, 19, 25, 33 and 42 are not workmen within the meaning of Section 2(S) of the Industrial Disputes Act and therefore the dispute in respect of the above persons cannot be considered as an industrial dispute and to that extent the reference is bad.
6. They denied that they are receiving any aid from the Government. Though the petitioner was set up in the year 1979 they recruited persons on temporary basis initially and it became a full fledged college only in the year 1984. Initially appointment were on temporary basis and on consolidated salary. As the institution was developed, they have regularized their services depending upon the requirement of the institute. The petitioner has adopted to its staff the pay scales, HRA, CCA paid by the State Government to its employees as far as practicable. Accordingly, the benefits have been conferred on the employees whose services were regularized after satisfactory completion of the initial period on temporary basis/ probation as the case may be. The regular pay scales, HRA, CCA have been given to the employees from the date of regularization of their services. No employee has got the legal right to demand the benefits of a permanent employee until their services are regularized in the institute. The employees whose name find a place in the claim statement have been given the regular pay scales, CCA, HRA from the date of their regularization. The demand of these employees that they should be given the said benefits from the year 1979 is unfounded and untenable in law. Their demand is stale, imaginary and therefore they are liable to be rejected.
7. The employees working in the petitioner are not entitled to benefits like the salary, DA, HRA, CCA, etc., on par with the employees working in the Karnataka Government Technical Institutions. The functioning and working of the Government institutions and the petitioner institute stand on separate footing and hence are not comparable institutions. They denied the allegation that the employees were paid less wages and salaries, were fixed unilaterally according to the whims and fancies. They stated that they have given preference to the local candidates of the area as far as possible in order to help them to gain experience and help their family. The demand of the first party claiming the amounts mentioned in the claim petition are unjustified and illegal. They denied the correctness of the claims made in paragraphs 6 and 7 of the claim statement and the first party was put to strict proof of the same. They denied their liability to pay interest at 25% p.a on the amounts claimed. Therefore, they prayed for the rejection of the claim.
8. When the above Writ Petition was taken up for final hearing the judgment of this Court rendered in ANAND S.S.AND ORS. v. MANAGEMENT OF MAHATMA GANDHI VIDYA PEETA (REGD.), BANGALORE AND ANR., 1999(111) LLJ 1064 was brought to the notice of the Court by the respondents' Counsel. In order to put an end to this litigation, the petitioner agreed to grant the benefit of government scales to the employees and further agreed to pay arrears of monetary benefits with effect from 1.1.1997 without prejudice to their contention. The respondents sought time to get instructions from their clients. It appears in the meanwhile the petitioner was called upon to place material before the Court showing the financial status of the petitioner - association. Accordingly, the petitioner filed an application under Order 6 Rule 17 read with Order 41 Rule 27 CPC placing on record the additional facts by way of an amendment and also documents in support of such additional facts.
9. The petitioner pleaded by way of amendment that the petitioner college is an unaided institution and the only source of income is the capitation fee collected from the students. As the collection of capitation fee is now controlled by a statute as well as the judgment of the Supreme Court the total fee received by the college is not sufficient to meet the recurring the non-recurring expenditure. There is a fall in the intake of students which has affected the maintenance of the college effectively for want of sufficient funds. The college is finding it extremely difficult to meet the mandatory requirements prescribed by AICTE in maintenance of minimum infractural facilities in terms of laboratories, library and teaching staff. The college cannot afford to divert the fee collected for payment of arrears of wages to the non-teaching staff. They have also produced statements supporting such allegations. Therefore, they contend that the institution has no financial capacity to pay any arrears of wages whatsoever in the interest of financial discipline and in the interest of students and public. They further submitted that they have conferred the benefits of pay scales, DA, HRA, CCA on its non-teaching staff on par with the non-teaching staff working in government technical institutions with effect from December 1999 subject to the result of the Writ Petition.
10. The respondents filed additional statement controverting the aforesaid allegations. They complained that the petitioner has not complied with the interim orders granted from time to time. The prohibition to collect capitation fee has in no way affected the financial position of the petitioner - institution and it is open to the petitioners to admit students to the full strength. The college is having all the facilities like their own building, library, laboratories, workshops, student hostels, internet facilities , etc., and therefore no more investment is required as alleged by the petitioner. The college is going to celebrate its Silver Jubilee in the year 2004. The respondents have set out in detail the arrears of wages which are due to them and which according to them has not been paid. They also pleaded institutions which are similarly placed have extended the Government pay scales and other allowances to the non-teaching staff. Therefore, the plea of financial incapacity raised by the petitioner is not a relevant fact to deny the earned wages of the respondent - workmen. Therefore, they prayed for dismissal of the Writ Petition.
11. Subsequently, the petitioner also filed a memo on 4.9. 2000 that the respondents have indulged in coercive and agitational attitude when the matter is pending before this Court and therefore they are constrained to withdraw the proposal made by them on 11.11.2000 for an amicable settlement of the dispute. Accordingly, they withdrew the offer made.
12. Before the Labour Court the first party examined one Thimme Gowda as WW1 who was working as a Lab Mechanic from 1981 and one G.V. Nataraja as WW2 who was working as an instructor from 1983. In support of their claim they have marked Exhibits W1 to W239. On behalf of the second party one Dr. Y.M.Reddy, the Principal of the Institute, has been examined and they marked Exhibits M1 to M16.
13. Considering the oral and documentary evidence on record and hearing both the parties, the Labour Court held as under:
(a) The Second Party institute is an industry within the meaning of Section 2(J) of the Industrial Disputes Act.
(b) The employees who are working as instructors and library instructors come under the category of non-teaching staff and therefore they are workmen under Section 2(S) of the Act.
(c) All the attenders who are doing the same duties are entitled for regular wages on regular pay scale together with other admissible allowances from the date on which they completed one year of service from the date of appointment on the principal of equal pay for equal work and the same principle is applicable to the helpers, SDCs, gardner and welder.
(d) The first party workmen are entitled to receive DA, HRA, CCA and other admissible allowances from the dates on which the Government notifications in respect of these benefits came into force and implemented and has paid to the non-teaching staff working in Government institutions.
After recording the aforesaid findings, the Labour Court proceeded to pass the award in terms as mentioned in paragraph 1 supra.
14. Aggrieved by the said award, the second party has preferred this Writ Petition challenging the correctness and legality of the said award.
15. Sri K. Laxminarayana Rao, learned Senior Counsel, appearing for the petitioner contended before me as under:-
(I) The jurisdiction of the tribunal in industrial disputes is limited to the points specifically referred for its adjudication and to matters understood thereto and the tribunal cannot go beyond the terms of the reference and therefore the findings recorded by the Labour Court as set out in the preceding paras as (a) and (b) and (c) are outside the scope of reference. As such it is one without jurisdiction and is liable to be set aside.
(ii) There is no law which imposes an obligation on the petitioner - management to pay the pay scales and other allowances paid to non-teaching staff in the Government technical education to the non-teaching technical employees of the first party respondent and therefore they are not entitled for such benefits and there is no justification in their claim.
(iii) Even though they are not entitled to such benefits, the petitioner - second party management has extended the benefits to its employees from the date they are regularized and therefore the directions issued in the award to regularize the services of the employees at the end of one year of their appointment and payment of arrears from that date onwards is ex facie illegal and is liable to be set aside.
16. Per contra, learned Counsel for respondent -1 contended as under:-
(i) In view of the judgment of this Court in the case of ANAND S.S. and ORS. v. MANAGEMENT OF MAHATMA GANDHI VIDYA PEETA (REGD.), BANGALORE AND ANR. (1999(111) LLJ (SUPP) 1064) employees of private educational institutions are entitled to the same scales of pay and privileges as are available to their counterparts in Government educational institutions and the fact that the private institutions are not getting any grant from the Government is not a ground to deny the employees what is legitimately due to them and therefore the award passed by 1he Labour Court is legal and valid and does not call for any interference.
(ii) The appointment orders to some of the employees which are marked in the case clearly demonstrates that the management did make applicable the pay scales and admissible allowances as per the notifications issued by the Government of Karnataka from time to time and therefore it is too late in the day for the management to contend that the employees are not entitled to Government pay scales.
(iii) The material on record clearly shows even among the employees who are before the Court there is discrimination in the matter of regularization of their services, fixation of pay scales and payment of other allowances and the second party management has offended the rule of equal pay for equal work among them. As such, the Labour Court was justified in granting the said relief.
(iv) Though the findings recorded by the Labour Court at paragraphs a to c referred to supra on the face of it appear to be outside the scope of reference they are matters incidental to the points specifically referred to and the Labour Court had jurisdiction to decide the said points thereby the award of the Labour Court granting the aforesaid prayers cannot be set aside on the ground of want of jurisdiction.
(v) During the pendency of the proceedings after the judgment of this Court referred to supra the management has extended the benefit of government pay scales and other allowances to other employees and what remains to be done is to pay the arrears only as awarded by the Labour Court, as such this is not a fit case for inference by this Court.
17. Now, the points that arise for my consideration is:-
(i) Whether the findings recorded by the Labour Court are beyond the terms of reference as such is liable to be set aside.
(ii) Whether the respondent-workmen are entitled to the pay scales and other benefits as paid to the non-teaching staff in Government and technical institutions from the year 1979 as awarded by the Labour Court.
18. Regarding Point No. (i):- The question whether the Tribunal has the jurisdiction to go beyond the terms of reference is no more res Integra. The Supreme Court in the case of POTTERY MAZDOOR PANCHAYAT v. THE PERFECT POTTERY COMPANY LIMITED, 1979 Lab. I.C. 827 has held as under:
"11. ........ The very terms of the references show that the point of dispute between the parties was not the fact of the closure of its business by the respondent but the propriety and justification of the respondent's decision to close down the business. That is why the references were expressed to say whether the proposed closure of the business was proper and justified. In other words, by the references the Tribunals were not called upon by the Government to adjudicate upon the question as to whether there was in fact a closure of business or whether under the pretence of closing the business the workers were locked out by the management. The references being limited to the narrow question as to whether the closure was proper and justified, the Tribunals by the very terms of the references, had no jurisdiction to go behind the fact of closure and inquire into the question whether the business was in fact closed down by the management."
19. The Supreme Court approved the finding of the Division Bench of the High Court of Karnataka in the case of GOURI SANKAR CHATTERJEE AND ORS. v. TEXMA COMPANY LIMITED AND ORS., (2001) 2 SCC 257 that the Tribunal had enlarged the scope of the reference thereby committed an error of jurisdiction. Similarly, in the case of INDIAN BANKS ASSOCIATION v. WORKMEN OF SYNDICATE BANK AND ORS., (2001) 3 SCC 36 the Supreme Court had held that issuing of directions beyond the terms of reference by the Industrial Tribunal is impermissible and such orders would be without jurisdiction. Therefore, it is clear that when a Labour Court renders a decision besides an issue and renders a decision beyond the terms of reference such decision and finding rendered by the Labour Court would be without jurisdiction and liable to be set aside. In this background it is necessary for us to consider what is the terms of reference made to the Labour Court and what is the decision rendered by the Tribunal on such reference.
20. As could be seen from the terms of the reference which is extracted at paragraph 2 of the Labour Court was called upon to decide whether the demand of the non-teaching employees of the Siddartha Institute of Technology, Tumkur, for revision of pay scales, CCA, interim allowance, pay and other allowances, on par with the pay scales, CCA and other allowances paid to the non-teaching staff in Government Technical Institutions from the year 1979 is justified. Therefore, the grievance of the workmen is that the institute has not extended to them the benefits to which the non-teaching staff in Government technical institutions are entitled to from the year 1979 when the institution was commenced. In answering the said reference it was not necessary for the Tribunal to have gone into the question whether the workmen are entitled to pay and allowances in the regular time scale of pay from the date on which they completed one year of service in the second party management from the date of initial appointment. Secondly, it was totally outside the scope of enquiry of the Labour Court to go into the question whether the employees who are working as instructors and library assistants come under the category of non-teaching staff and therefore they are workmen under Section 2(S) of the Act. Therefore, it is clear in view of the terms of reference the aforesaid two questions namely whether the instructors and library assistants are workmen under the Act and whether the workmen are entitled to regular pay scale and admissible allowances from the date on which they completed one year of service from the date of appointment fall beyond the scope of enquiry in terms of the reference. Therefore, the finding recorded by the Tribunal on these aspects is one without jurisdiction and therefore it is hereby set aside.
21. Regarding Point No. (ii): The order of appointments which are marked in the case as Exhibits W113, 114, 116, 117, 118,. 124, 125, 126, 127, 128, 129, 130, 131, 132 makes it abundantly clear those workmen were appointed temporarily on probation for a period of one year. Thus it is clear these workmen were not appointed in the manner prescribed under Rule 6 of the Karnataka Private Educational Institutions (Discipline and Control) Rules, 1978 (for short hereinafter referred to "Rules 1978"). Their services were continued from time to time and they were confirmed and regular pay was paid as per the dates mentioned in Annexure-G. The said employees had no grievance whatsoever regarding the date of confirmation. A perusal of the claim statement as well as the impugned award makes it clear none of the workmen who are claiming the benefit were in employment of the petitioner in the year 1979. All of them have been appointed from 1980 onwards. However, they claim pay, dearness allowance, washing allowance, house rent allowance, city compensatory allowance, new pay scales, increments, interim relief, etc., since 1979 on par with the government scales prescribed from time to time to the non-teaching staff/employees of government technical institutions. When an employee has not been appointed in terms of Rule 6 of Rules 1978 the question of he being entitled to regular time scale of pay from the date on which he completed one year of service from the date of initial appointment would not arise. As the initial appointment was a temporary one and was in contravention of Rule 6 of Rules 1978 no right accrues to such employees. It is only from the date they are confirmed in the respective posts by the management they became permanent employees and are entitled to the pay scales prescribed under Rule 5 of the Rules 1978.
22. Though Rule 5 of the Rules 1978 provide that the scale of pay of an employee of an Institution shall not be lower than the scale of pay of an employee of a corresponding post in the government educational institutions it does not ipso facto mean that the benefit of DA, CCA, HRA, and other allowances are to be paid to such employees which non-teaching staff of the government technical institutions are entitled to. Rule 5 only provides for payment of scale of pay and it does not refer to any allowances. Before a set of employees could claim parity of pay scales on the principle of equal pay for equal work it has to be shown by such claimants that qualitatively and quantitatively the work which they do is the same type and nature as that of their counter parts whose pay scales are pressed into service for getting the parity. Not only that even educational qualifications must be identical. It is well settled by a series of decisions by the Supreme Court, different pay scales could be prescribed for employees having different educational qualifications. Therefore, even the aforesaid doctrine of equal pay for equal work only refers to pay and not to other allowances. In the case of MAHATMA GANDHI VIDYA PEETA, this Court was interpreting Rule 5 of Rules 1978 and it has been held that the provisions of Rule 5 would squarely apply to the petitioners who were working as non-teaching employees of the respondent society who are in the light of the said provision are entitled to the pay scales that cannot be lower than once admissible to the employees holding corresponding posts in the government educational institutions. Therefore, it is clear from the aforesaid judgment also what the employees in private educational institutions are entitled to is the pay scales which are admissible to the employees working in government institutions on equivalent posts. That judgment is of no assistance to the respondents to substantiate their claim for other monetary benefits such as DA, HRA, CCA and other allowances which are outside the purview of "the pay"
23. Now coming to the question from what date these persons are entitled to pay scales as extended to persons employed in government institutions in equivalent posts is concerned it could only be from the date they are made permanent employees because the date of joining to duty in the institution is of no relevance as none of them were appointed in terms of Rule 6 of the Rules 1978. Equal pay for equal work could be claimed by them only from the date of their absorption into service permanently by an institute. When they were appointed in the institution, when their services were made permanent in the institution is a matter on which no material is placed on record before the Labour Court. It is because of that reason the Labour Court directed that they are entitled to regular time scale pay from the date on which they completed one year of service in the second party management from the date of initial appointment. The said direction absolutely has no basis whatsoever and cannot be sustained. The workmen are claiming the benefit of equal pay for equal work as per the various government orders issued from time to time from the year 1979 the date on which the institution was commenced. The date of starting of the institution has no relevance in extending the benefit of equal pay for equal work to its employees. The statement contained in the impugned award as well as in the claim statement makes it clear that none of the 43 employees who are claiming benefit in these proceedings were employed in 1979 as all of them were employed on different dates and from 1980 onwards it is necessary to find out when they were appointed and when their appointment became permanent. This is an exercise which the institution has to do. In the event of the workmen accepting the dates mentioned in Annexure-G which gives an indication of the date on which they were confirmed as according to the said statement they were paid regular pay is accepted, the parties could work out rights on the basis of the said statement. Otherwise, the petitioner-institution has to carry out exercise and decide the date on which the workmen were confirmed in the respective posts.
24. In so far as payment of arrears is concerned the question for consideration is whether these workmen are entitled to payment of arrears from the date they were confirmed in the respective posts. Though the workmen were appointed in 1981, 1982, 1983 and 1984 they have not chosen to put forth this claim for nearly a period of ten years. It is only on 31.3.1990 the reference was made by the Government to the Labour Court for adjudication. The said claim was put forth by the workmen on the basis of equal pay for equal work. It is not in dispute that the petitioner-institution is not a government aided institution. The polytechnic is one of the institutions run by the petitioner-society. It is not in dispute that the petitioner-society is running several educational institutions from primary level to the professional colleges all of which are situate in rural parts of the State. They have set up about 56 institutions covering primary, middle, high schools, colleges in arts, science, engineering, medical, dental, nursing, ITI and others. Some of the institutions are aided by the Government. However, Siddartha Institute of Technology which was started in the year 1979 is not an aided institution and the first batch of students completed their degree course in the year 1984. The society gave preference to persons who belonged to the economical weaker section and rural areas and they were paid a consolidated salary on a temporary basis depending upon the requirements. In fact some of them do not possess requisite qualification also. However, it is only after the decision of this Court in the above case holding that Rule 5 of Rules 1978 provide for payment of pay scales not lower than a corresponding post in the Government educational institutions the institution came forward to extend the said benefit. The said judgment was rendered on 27.1.1998. In fact the petitioner in order to set at rest all the controversies and to have peace in the campus came forward and gave a proposal to pay arrears from 1.1.1997 which was later withdrawn in view of the coercive steps resorted to by the respondents. It is also brought on record that in view of the large number of engineering colleges started in the State the institution has not been able to fill the full strength sanctioned to them by the Government. In view of the prohibition to collect capitation fee and also the judgments of the Supreme Court their finance is completely controlled. Under these circumstances these institutions are financially not viable and at any rate they are unable to bear the financial strain in the event of the benefit extended to their employees as that of the government servants and in particular they would be unable to pay the arrears of emoluments if any. After the pronouncement of the aforesaid judgment, the petitioner has extended the benefit of the pay scales of the Government to its employees which clearly demonstrates the bonafides on the part of the petitioner. Taking into consideration the aforesaid facts in particular the way these workmen were employed, the location of the college, the financial constraints in raising resources and law governing the same, I am of the opinion justice of the case would be met if the petitioner-institution is directed to pay arrears of the difference in pay scale from the date of the judgment of this Court which was rendered in January 1998, i.e. from 1.1.1998. It is made clear the arrears to which the respondents are entitled to is only in respect of the difference in the pay scale and they would not be entitled to any other allowances as claimed by them. Hence, I pass the following order.
25. Writ Petition is partly allowed and the award of the labour Court is modified as hereunder:
a) The demand of non-teaching employees of the respondent for revision of pay scales only on par with the pay scales paid to the non-teaching staff in Government technical institutions is justified. They are entitled to "pay scale" of an employee of a corresponding post in the Government educational institutions.
b) The question of equivalence of post held by the non-teaching employees of the respondent with those in the Government institutions would require a comprehensive exercise by reference to the relevant rules and the nature of duties assigned to those holding the post being equated and therefore the said exercise is to be carried out by the petitioners within a period of four months from today and then grant the benefit of extension of pay scales.
As none of them were appointed as required in terms of Rule 7 of Karnataka Private Educational Institutions (Discipline and Control) Rules, 1978 which is a condition precedent for application of Rule 5, they would be entitled to the said benefit only from the date of confirmation of their employment.
If the said confirmation is under dispute the same is also to be decided by the Management before the aforesaid benefit is extended.
c) The workmen are entitled to receive DA, HRA, CCA and other admissible allowances as per the terms of their order of appointment.
d) However, in so far as the question of payment of arrears is concerned , the workmen are entitled to arrears from 1.1.1998 for the reasons set out in para 24 of the order. All payments made to the workmen earlier to the proceedings or during pendency of the proceedings till today are not liable to be repaid to the petitioner.
e) The award of the Labour Court declaring that the employees who are working as instructors and library instructors come under the category of non-teaching staff and therefore they are workmen under Section 2(S) of the Act is hereby set aside.
However, liberty is reserved to those employees to raise an industrial dispute to get their status declared and if they are held to be workmen, then they would be entitled to all the benefits flowing from this order to the extent which is applicable to them.
f) The award of the labour Court that all the attenders who are doing the same duties are entitled for regular wages on regular pay scale together with other admissible allowances from the date on which they completed one year of service from the date of appointment on the principle of equal pay for equal work and the same principle is applicable to the helpers, SDCs, gardner and welder is hereby set aside.
No costs.