Gujarat High Court
Pbm Polytex Ltd vs Dineshkumar S Vyas on 31 March, 2014
Author: N.V.Anjaria
Bench: N.V.Anjaria
C/SCA/5906/2005 CAV JUDGMENT
IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
SPECIAL CIVIL APPLICATION NO. 5906 of 2005
FOR APPROVAL AND SIGNATURE:
HONOURABLE MR.JUSTICE N.V.ANJARIA
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1 Whether Reporters of Local Papers may be allowed to see Yes
the judgment ?
2 To be referred to the Reporter or not ? Yes
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, 1950 or any
order made thereunder ?
5 Whether it is to be circulated to the civil judge ? No
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PBM POLYTEX LTD....Petitioner(s)
Versus
DINESHKUMAR S VYAS....Respondent(s)
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Appearance:
MR DG CHAUHAN, ADVOCATE for the Petitioner(s) No. 1
MR BHAVIK A JOSHI, ADVOCATE for the Respondent(s) No. 1
MR HL RAVAL, ADVOCATE for the Respondent(s) No. 1
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CORAM: HONOURABLE MR.JUSTICE N.V.ANJARIA
Date : 31/03/2014
CAV JUDGMENT
Page 1 of 14
C/SCA/5906/2005 CAV JUDGMENT
The present petition is filed against order dated 28th October, 2004 passed by Labour Court, Ahmedabad in Recovery Application No.3416 of 1989. By the said impugned order, Labour Court held the respondent herein to be entitled to recover Rs.67,540.98 P., and directed the petitioner herein to make the payment.
2. The relevant facts may be stated before hand. The respondent was appointed under order dated 14th December, 1984 as Office Assistant at Ahmedabad Office. His appointment took effect from 01st January, 1985, and was on ad-hoc basis initially for a period of three months and on consolidated salary of Rs.700/- per month. Thereafter his salary was hiked from time to time, and in the month of October, 1989, his consolidated salary became Rs.01,230/- per month.
3. The workman filed Recovery Application under Section 33-C(2) before the Labour Court. Therein he had contended that he was workman within the meaning of Section 2(s) of the Industrial Disputes Act, 1947 (hereinafter mentioned as 'the Act'); that he was conscientiously discharging his duties; his pay was increased by the employer therefore. He contended that however the employer was not granting benefit of settlement-cum-award. It was stated that a settlement was entered into between the petitioner Mills company and its workmen. He was entitled to benefits of pay- scale revision, dearness allowance, high cost allowance and other interim benefits under the said settlement but was not paid. In the statement produced Page 2 of 14 C/SCA/5906/2005 CAV JUDGMENT at Annexure-A along with the Recovery Application he claimed the aforesaid amount as being payable to him. 3.1 The application was contested by the petitioner-employer. It was stated that though it was true that the settlement was entered into by the Mills company with the representative union of the employees, the said settlement was with the representative union of the employees working at Petlad. It was contended that the said settlement was not applicable to the workman. It was stated that the workman was appointed at Ahmedabad Office and was working at Ahmedabad Office as Office Assistant. It was further stated that when workman was joined in 1985, he was paid consolidated salary of Rs.700/-, thereafter ad-hoc increase was given to him in his salary and from October, 1989, his pay was hiked to Rs.01,230/-. It was further contended that the workman working at the Petlad in the Mills company were being paid Dearness Allowance and other allowances as per the settlement, whereas staff working at Ahmedabad Office are paid salary and they were not in any way concerned with the settlement reached for the employees at Petlad.
3.2 In the present petition, the petitioner company filed affidavit dated 07th January, 2013 and along with other contentions in support of the case in the petition, produced copy of Memorandum of Settlement of February, 1985 which was relied on by the workman in support of his recovery claim. Thus the Settlement in question is on record of the present proceedings. Another fact pointed out in this Page 3 of 14 C/SCA/5906/2005 CAV JUDGMENT affidavit was that the respondent had preferred criminal complaint No.339 of 1989 under Sections 106 and 107 of the Bombay Industrial Relations Act, 1946 before the Labour Court, Ahmedabad alleging that by not according various benefits to him under the Settlement/award, petitioner had committed offence. The said application was dismissed by the Labour Court on 18th February, 2002 holding that offence punishable under Sections 106 and 107 of the BIR Act was not made out.
4. Learned advocate Mr.D.G. Chauhan for the petitioner contended that impugned order of the Labour Court amounted to wrongful exercise of jurisdiction under Section 33-C(2) of the Act. This was because, learned advocate submitted, for exercise under the said provision necessary condition was that the claim of the workman ought to be in the nature of a pre- existing right and one already adjudicated upon. In support of this contention, he relied on decision of the Apex Court in State Bank of India Vs Ram Chandra Dubey [(2001) 1 SCC 73]. Another decision in State of U.P. And another Vs Brijpal Singh [(2005) 8 SCC 58] was also pressed into service.
4.1 Learned advocate for the petitioner submitted that the settlement was not applicable to the respondent-workman who was employee at Ahmedabad Office, the settlement being between Petlad employees' representative union and the Mills company. He buttress his submission by preferring to the relevant evidence on the aspect, which was before the Labour Page 4 of 14 C/SCA/5906/2005 CAV JUDGMENT Court.
4.2 On the other hand, learned advocate Mr.H.L. Rawal for the respondent-workman submitted that workman was employee of the Mills company. He relied on appointment order. The same was issued by the Petlad Bulakhidas Mills Company Limited having registered office at Petlad, he highlighted. It was next submitted by learned advocate for the workman that finding regarding applicability of the settlement recorded by the Labour Court was based on evidence and there was no good ground to question the same. He submitted that the evidence from the side of the employer itself suggest that workman was sent to Petlad for doing work. It was submitted that in any view, the respondent being employee of the Mills company, settlement arrived at by the Mills company with the employees would apply to him. Learned advocate submitted that settlement was not produced before the Labour Court, therefore, it was not open to the petitioner to produce the same in the present petition and could not have been permitted to be relied on.
5. Section 33C(2) of the Industrial Disputes Act, 1947 reads as under:
"33C. Recovery of money due from an employer.
(1) ... ... ... ...
(2) Where any workman is entitled to receive from the employer any money or any benefit which is capable of being computed in terms of money and if any question arises as to the Page 5 of 14 C/SCA/5906/2005 CAV JUDGMENT amount of money due or as to the amount at which such benefit should be computed, then the question may, subject to any rules that may be made under this Act, be decided by such Labour Court as may be specified in this behalf by the appropriate Government within a period not exceeding three months.
Provided that where the presiding officer of a Labour Court considers it necessary or expedient so to do, he may, for reasons to be recorded in writing, extend such period by such further period as he may think fit."
6. At the outset, the nature of jurisdiction exercisable by the Labour Court under Section 33-C(2) of the Act and principles of law in that regard may be considered.
6.1 Right from the decision of the Supreme Court in Central Inland Water Transport Corporation Vs The Workmen and another [(1974) 4 SCC 696], it is well settled that proceedings under Section 33-C(2) are in the nature of execution proceedings. The Apex Court in the case of Punjab Beverages (P) Ltd. v. Suresh Chand [1978(2) SCC 144] reiterated this principle. It was held, "It is not competent to the Labour Court exercising jurisdiction under Section 33-C(2) to arrogate to itself the functions of an Industrial Tribunal and entertain a claim which is not based 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 Act." (para 4) 6.2 In Municipal Corpn. of Delhi v. Ganesh Razak [1995(1) SCC 235], the Supreme Court explained, Page 6 of 14 C/SCA/5906/2005 CAV JUDGMENT "The High Court has referred to some of these decisions but missed the true import thereof. The ratio of these decisions clearly indicates that where the very basis of the claim or the entitlement of the workmen to a certain benefit is disputed, there being no earlier adjudication or recognition thereof by the employer, the dispute relating to entitlement is not incidental to the benefit claimed and is, therefore, clearly outside the scope of a proceeding under Section 33-C(2) of the Act. The Labour Court has no jurisdiction to first decide the workmen's entitlement and then proceed to compute the benefit so adjudicated on that basis in exercise of its power under Section 33-C(2) of the Act. It is only when the entitlement has been earlier adjudicated or recognised by the employer and thereafter for the purpose of implementation or enforcement thereof some ambiguity requires interpretation that the interpretation is treated as incidental to the Labour Court's power under Section 33-C(2) like that of the executing court's power to interpret the decree for the purpose of its execution."
(para 12) 6.3 Again, in State Bank of India v. Ram Chandra Dubey [(2001) 1 SCC 73] this Court explained the legal position on the scope of Section 33-C(2) and the cases in which the remedy could be resorted to in these words.
"Whenever a workman is entitled to receive from his employer any money or any benefit which is capable of being computed in terms of money and which he is entitled to receive from his employer and is denied of such benefit can approach Labour Court under Section 33-C(2) of the Act. The benefit sought to be enforced under Section 33-C(2) of the Act is necessarily a pre-existing benefit or one flowing from a pre-existing right. The difference between a pre-existing right or benefit on one hand and Page 7 of 14 C/SCA/5906/2005 CAV JUDGMENT the right or benefit, which is considered just and fair on the other hand is vital. The former falls within jurisdiction of Labour Court exercising powers under Section 33-C(2) of the Act while the latter does not. It cannot be spelt out from the award in the present case that such a right or benefit has accrued to the workman."
(para 8) 6.4 Referring to and relying on its own decision in Ram Chandra Dubey (supra), the Apex Court reemphasized the principles in State of U.P. Vs. Brijpal Singh [(2005) 8 SCC 58],in following words:
"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 before a forum 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 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 ID Act. Therefore, the Labour Court had no jurisdiction to adjudicate the claim made by the respondent herein under Section 33-C(2) of the ID Act in an undetermined claim and until such adjudication is made by the appropriate forum, the respondent workman cannot ask the Labour Court in an application under Section 33-C(2) of the ID Act...."
(para 13) 6.5 This Court also enunciated the position of law in caravan of decisions. In Shashikant N.Dhabuwala Versus Baroda Rayon Corporation [1997 (1) GCD 775], it was highlighted as under:
Page 8 of 14 C/SCA/5906/2005 CAV JUDGMENT"Any workman approaching the Labour court under Sec. 33(c) for enforcement of right or benefit must, therefore, be able to point out some pre- existing right or benefit which he seeks to enforce. If he seeks some new right or benefit in the conditions of service or some new benefit, neither acquired nor granted nor conferred by the ID Act, the workman ought to pursue remedy by way of a Reference under Sec. 10 of the ID Act and he cannot approach the Labour court under Sec. 33-C (2). In order to come within the purview of Sec. 33-C(2), the workman must be entitled to receive from the employer some money or benefit. This entitlement may depend upon adjudication of the right or may depend upon interpretation of certain existing right, if this entitlement depends upon adjudication of the right for the first time, then obviously, adjudication part cannot come within the ambit of Sec. 33-C(2). If on the other hand, the right is patently available but has to be found only by reading of any document, settlement or award, that could be done within the scope of Sec. 33-
C(2)." (para 10) 6.6 Decision in Naranji Peraji Transport Co. Vs
Ramniklal B. Waghela [1998(1) GLH 88] and also in Lallubhai Bapujibhai Parmar [2005 (3) GCD 2621 (Guj)] and in Arora Industries Vs Abdulhameed Abdulrasheed [2006 (III) LLJ 24 (Guj)], asserted the principles. Again in Director Vs. Parmar Mahesbhai Devjibhai [2007 (2) G.L.H. 488], the Court referring to apex decision in Brijpal Sing (supra), "The Supreme Court has observed that whenever a workman is entitled to receive from his employer any money or any benefit which is capable of being computed in terms of money and which he is entitled to receive from his employer and is denied such benefit, he can approach the Labour Court under Section 33-C[2] Page 9 of 14 C/SCA/5906/2005 CAV JUDGMENT of the Act. The benefits sought to be enforced under Section 33-C[2] of the Act is necessarily a pre-existing benefit or one flowing from a pre-existing right. According to the Supreme Court, the difference between a pre-existing right or benefit on one hand and the right or benefit which is considered just and fair on the other hand is vital. The former falls within the jurisdiction of the Labour Court exercising powers under Section 33-C[2] of the Act, while the latter does not."
(para 7) 6.6.1 The Court stated further, "A Labour Court is not required to entertain an application under Section 33-C[2] if it is not prima facie satisfied that there exists no dispute between the parties. Eve if such submission is made in the application filed under Section 33-C[2] and the other party/employer comes and raises a dispute even for the sake of a dispute, the Labour Court will have to stay its hands and have to ask the claimant to make an application under Section 10 of the Industrial Disputes Act. A Labour Court, after an inquiry, cannot hold that as there does not exist any dispute, the Labour Court would be entitled to exercise its powers under Section 33-C[2] of the Act."
(para 8)
7. Proceeding to consider the case, keeping in view the aforesaid position of law with regard to the nature and scope of jurisdiction of the Labour Court under Section 33-C(2) of the Act, the claim of the workman in his Recovery Application was based on the settlement arrived at between the petitioner-employer and its workmen. The said settlement is produced by the petitioner in this petition on record. The contention of learned advocate for the workman that the said document should not be considered by this Page 10 of 14 C/SCA/5906/2005 CAV JUDGMENT Court as produced first time before this Court, could not be accepted. The entire case of the workman in his application under Section 33-C(2) was founded on the settlement, and in that view, contention that the document of settlement could not be looked into, was self-defecting and self-contradictory. The contention is unacceptable also for the reason that the settlement was a decisive material in considering the case of the workman which he has been agitating by way of present petition as well. This Court is not precluded from considering in this jurisdiction something on which the very case and contentions of the parties rested.
7.1 The said settlement was between the employer and the General Secretary, The Majoor Mahajan Sangh, Petlad and stated that "whereas a notice of change in Form L dated .1985 has been given by the Majoor Mahajan Sangh, Petlad, which is a representative union, representing the employees working in the cotton textile industry at Petlad under BIR Act, 1946, to the mills company proposing to revise the pay- scales of Junior Clerk and Senior Clerk, etc.". The terms of settlement inter alia mentioned the pay-scale of the Junior Clerks proposed to be revised. Secondly, the letter of appointment produced at Annexure-A (page No.13) dated 14th December, 1984 pursuant to which the respondent was appointed, stated that he was posted at Ahmedabad Office. In the application under Section 33- B(2) itself, as such, it was the case of the workman that he was joined as Office Assistant at Ahmedabad Office. In his evidence at Exhibit 8, workman admitted Page 11 of 14 C/SCA/5906/2005 CAV JUDGMENT that he joined at Ahmedabad. He stated that he used to go to Petlad for work. In the evidence of witness (Exh.23) examined on behalf of the employer, it was suggested that the pay-scales applicable to Petlad mills were not applied for Ahmedabad Office, and the agreement reached for Petlad were not applicable for Ahmedabad. Learned advocate highlighted that even the pay-scales mentioned in the settlement to be subjected to revision did not match the salary paid to the respondent workman at Ahmedabad office, which was a consolidated pay.
7.2 The Labour Court in the impugned order, although accepted the position that the workman was working at Ahmedabad Office of the Mills company on the post of Office Assistant, it reasoned that he used to go to Petlad Mills in connection with the work. The Labour Court recorded that copy of the settlement/award was not produced by the employer. The Labour Court took view that the amounts claimed by the workman as per the settlement at Annexure-A with his application was found to be acceptable and the other side having not produced copy of settlement despite being required and it having failed to dislodge the amount sought to be recovered, passed order for payment of Rs.67,540.98 P. as above.
7.3 It could be thus validly contended that the exercise of jurisdiction by the Labour Court granting the application of the workman under Section 33-C(2) was not a valid and legal exercise. The finding of the Page 12 of 14 C/SCA/5906/2005 CAV JUDGMENT Labour Court that the employer could not dispute the calculation of the amount given by the workman in the statement filed with his recovery application was wrong, erroneous, factually baseless and not wholly misdirecting.
7.4 Thus, manifestly the case and the claim of the workman in his Recovery Application was not based on any pre-existing right, nor it was for an adjudicated benefit. The claim of the workman was seriously disputed on the various counts above.
8. The legal position on the nature and ambit of powers of the Labour Court under Section 33-C(2), as already highlighted hereinabove, is that these proceedings do not involve a right of applicant and the corresponding liability of the respondent. Whether the defendant is liable or not, is not the question to be gone into in 33-C(2) proceedings. These two functions are normally to be subject matter of a suit and not of an execution proceeding. It is held that when a claim is made before the Labour Court under Section 33-C(2), Court must clearly understand the limitations under which it has to function. It cannot arrogate itself to the functions of an Industrial Tribunal which alone may make such adjudication. The workman cannot put forward a claim in application under Section 33-C(2) in respect of a matter not based on an existing right.
9. The Labour Court therefore was evidently in error of law in exercising the jurisdiction under Page 13 of 14 C/SCA/5906/2005 CAV JUDGMENT Section 33-C(2) of the Act and allowing the Recovery Application. The remedy of the workman, if the workman wanted to assert and establish that the benefit under the settlement ought to have been given to him, his remedy was to lie elsewhere.
10. For the foregoing reasons and discussion, the impugned order dated 28th October, 2004 passed by the Labour Court, Ahmedabad in Recovery Application No.3416 of 1989 would not be sustained in law. The same is required to be set aside. Accordingly it is herewith quashed and set aside.
11. The petition is allowed. Rule is made absolute.
(N.V.ANJARIA, J.) Anup Page 14 of 14