Madras High Court
Godrej And Boyce Manufacturing Co. ... vs Principal Labour Court, Madras And Anr. on 20 August, 1991
Equivalent citations: (1992)IILLJ201MAD, (1991)IIMLJ5
ORDER Kanagaraj, J.
1. The writ-petitioner challenges the validity of the award made by the Labour Court in Industrial Dispute No. 571 of 1989, dated December 14, 1990. The charge against the second respondent who is the Typewriter Mechanic, in the petitioner-company in the domestic enquiry was that he submitted false claims. It is alleged that he had not visited certain customers nor serviced their machines but he had claimed conveyance and lunch allowance. The Labour Court, to whom the dispute was ultimately referred has substantially found that the charges had been established. However the Labour Court ultimately held that the back-wages alone worked out of Rs. 97,500 and, if the petitioner is deprived of the same, it would be sufficient punishment. In this view of the matter, the Labour Court directed the reinstatement of the second respondent without back-wages.
2. I admitted the writ petition and granted an interim order of stay on January 22, 1991. The second respondent worker has now come up with an application under S. 17B of the Industrial Disputes Act. Though a perusal of S. 17B of the Industrial Disputes Act suggests that pending disposal of a proceeding in the High Court against the award, the employer should be directed to pay full wages last drawn by the worker inclusive of allowances, etc., so long as the worker is not employed of elsewhere, Sri Sanjay Mohan, learned counsel for the petitioner in the writ petition, has brought to my notice certain judgments of this Court and also a Judgment of the Bombay High Court to the effect that in a fit and proper case it is open to the High Court to deny the benefit of S. 17B of the Industrial Disputes Act to a worker. I will only quote the judgment of a Division Bench of this Court in Chitram and Company Ltd. (represented by its Senior Manager) Finance and Administration v. Union of India (represented by Secretary, Ministry of Labour), New Delhi, and Others (1990 (1) MLJ. 155), which is as follows :
"Despite the introduction of S. 17B into the Act, this Court is not denuded of its power to make appropriate orders and give directions depending on the facts and circumstances of each case. Section 17B of the Act by its specific terms, does not even refer to the powers of this Court under Art. 226, much less restrict the same which is permissible for legislation short of constitutional amendment. We are not prepared to hold that S. 17B of the Act has made an inroad into the powers of this Court under Arts. 226 and 227 of the Constitution of India which are wide enough to take note of specific contingencies in each case and provide reliefs and give directions appropriate, in such cases."
Per contra Sri Fenn Walter, learned counsel, brings to my notice, the judgment of the Supreme Court in Bharat Singh v. New Delhi Tuberculosis Centre (1986-II-LLJ-217). The said judgment of the Supreme Court had also been considered by the Division Bench referred to above. There is also another judgment of a Division Bench of this Court which is brought to my notice by Sri Fenn Walter. It is in Writ Appeal No. 1009 of 1988, dated 2 May 1989. The relevant portion of the said judgment of the Division Bench reads as follows.
"All these contentions are irrelevant when this statutory right crystallises on the refusal by a management to reinstate a worker as ordered by a Labour Court, and of the validity of the said award is pending disposal either in the High Court, or in the Supreme Court. Once the said pre-condition comes into existence, the liability to pay under S. 17B is foisted on the management. That it could avoid only if it is able to show that the workman is otherwise gainfully employed during the relevant period. No material had been placed before Court that he is any where gainfully employed during this period. If he gets employment in spite of an order under S. 17B, then certainly, the Court can be moved for revoking the order for the relevant periods. But, in the instant case, when first respondent had not filed any counter, the appellant is entitled to the relief as prayed for."
3. I am of the opinion that there is an apparent conflict between the said two Division Bench decisions of this Court. The point which has to be decided is whether, if all the three conditions referred to by the Supreme Court and adumbrated in S. 17B are satisfied, it is mandatory for the management to pay last drawn wages, or has the Court still a discretion under Art. 226 of the Constitution of India to go into the question and award a lesser amount than the exact quantum of last drawn wages ? I feel that it is better if a Division Bench or a Fuller Bench considers this issue according to My Lord, the Chief Justice, I therefore, place this writ miscellaneous petition before My Lord the Chief Justice, to be posted before an appropriate Bench.
ORDER Mishra, J.
1. A learned Single Judge of this Court has referred a question whether and if all the three conditions referred to by the Supreme Court and as adumbrated in S. 17B of the Industrial Disputes Act, 1947 (inserted therein by Central Act 46 of 1982), are satisfied, it is mandatory for the management to pay last drawn wages, or has the Court still a discretion under Art. 226 of the Constitution of India to go into the question and award a lesser amount than the exact quantum of last drawn wages ?
2. A Division Bench of this Court in Writ Appeal No. 1009 of 1988 (order, dated May 2, 1989) has said :
"All these contentions are irrelevant when this statutory right crystallises on the refusal by a management to reinstate a worker as ordered by a Labour Court, and if the validity of the said award is pending disposal either in the High Court or in the Supreme Court. Once the said pre-condition comes into existence, the liability to pay under S. 17B is foisted on the management. This it could avoid only if it is able to show that the workman is otherwise gainfully employed during the relevant period. No material has been placed before Court that he is any where gainfully employment during this period. If he gets employment in spite of an order under S. 17B then certainly, the Court can be moved for revoking the order for the relevant periods. But in the instant case, when first respondent had not filed any counter, the appellant is entitled to the relief as prayed for."
3. The Bench has thus found that the statutory right of the workman under S. 17B of the Act cannot be avoided by the management except in the case of the workman being found otherwise gainfully employed during the relevant period.
4. In Chitram and Company, Ltd. v. Secretary, Ministry of Labour (supra), however, another Division Bench of this Court has said :
"It is not as if that only by virtue of the introduction of S. 17B into the Act, this Court gets vested with jurisdiction to make appropriate orders for the benefits of the workman facing a challenge by the employer of the award that has ensured to the benefit of the workman at the hands of the industrial forum. This Court always exercised and shall continue to exercise its powers taking note of the relevant facts and circumstances of each case and it always endeavoured and shall endeavour to give amelioration and reliefs to the workman, despite the pendency of the challenge over the award in his favour at the instance of the employer. This power was always there before and continues to be there even after the introduction of S. 17B and if at all, what S. 17B could be said to have done is a codification of the entitlement and rights of the workman. But, the section cannot be construed as in any manner taking away or fettering the plenary powers of this Court under Arts. 226 and 227, to make appropriate orders taking note of the relevant facts. The outlines for the entitlement and rights of the workman have been etched out by the section, but the working out the same in an appropriate manner could be only by this Court. Despite the introduction of S. 17B of the Act, this Court is not denuded of its power to make appropriate orders and give directions depending on the facts and circumstances of each case. Section 17B of the Act by its specific terms, does not even refer to the powers of this Court under Art. 226, much less restrict the same which is not permissible for legislation, short of constitutional amendment. We are not prepared to hold that S. 17B of the Act has made an inroad into the powers of this Court under Arts. 226 and 227 of the Constitution of India which are wide enough to take note of specific contingencies in each case and provide reliefs and given directions appropriate in such case. Hence, we are not persuaded to countenance the first contention, put forth by the learned counsel for the appellant."
5. We can say straightway that the judgment of this Court in Writ Appeal No. 1009 of 1988 has proceeded on the assumption that there could have been no denial of relief to the workman, who filed a petition claiming that he was entitled to be paid monthly the last drawn wages during the pendency of the writ petition when the management failed to implement or questioned the validity of the award. The Bench rejected the contention of the learned counsel for the employer bank that when the employer had lost confidence for the reason that he had misappropriated funds of a co-employee and had absented unauthorisedly following that act, it would not be in the interest of the bank to reinstate him as well as that when a sum of Rs. 17,500 had been already paid, a relief of this nature was unavailable to him. The Bench did so saying about the effect of the provision in S. 17B of the Act as quoted above even though the sum already paid, that is to say, Rs. 17,500 did cover the period involved in S. 17B. In case of Chitram and Company, (supra) the Court made the above quoted observation after examining whether S. 17B was ultra vires Arts. 14 and 19(1)(g) of the Constitution or ultra vires on ground of irrecoverability of the amounts disbursed under it in case final orders went in favour of the management as well as the question whether this provision made inroads into the powers of High Court under Arts. 226 and 227 of the Constitution of India.
6. Section 17B of Act reads as follows :
"Payment of full wages to workman pending proceedings in higher Courts. Where in any case, a Labour Court, Tribunal or National Tribunal by its award directs reinstatement of any workman and the employer prefers any proceedings against such award in a High Court or the Supreme Court, the employer shall be liable to pay such workman, during the period of pendency of such proceedings in the High Court or the Supreme Court, full wages last drawn by him, inclusive of any maintenance allowance admissible to him under any rule if the workman had not been employed in any establishment during such period and an affidavit by such workman had been filed to that effect in such Court :
"Provided that where it is proved to the satisfaction of the High Court or the Supreme Court that such workman had been employed and had been receiving adequate remuneration during any such period or part thereof, the Court shall order that no wages shall be payable under this section for such period or part, as the case may be."
7. In the case of Bharat Singh v. New Delhi Tuberculosis Centre (vide supra), the Supreme Court examined the scope of S. 17B on the basis of the rival contentions of the parties to say in a case where the award had become final prior to 21 August 1984, that S. 17B could not be pressed into service to reopen the same, but when the award was challenged and the challenge was pending, the section became operative. While interpreting S. 17B the Supreme Court said in Para 6, at pages 219-220 :
"The three necessary ingredients for the application of the section are :
(i) the Labour Court should have directed reinstatement of the workman :
(ii) the employer should have preferred proceedings against such award in the High Court or in the Supreme Court,
(iii) the workman should not have been employed in any establishment during such period."
The Supreme Court adverted to the objects and reasons for enacting the section to notice in Para. 9 (p 220) :
"When Labour Courts pass award of reinstatement, these are often contested by an employer in the Supreme Court and High Courts. It was felt that the delay in the implementation of the award causes hardship to the workman concerned. It was, therefore, proposed to provide the payment of wages last drawn by the workman concerned, under certain conditions, from the date of the award till the case is finally decided in the Supreme Court or High Courts."
and observed in Para 10 :
"The objects and reasons give an insight into the background why this section was introduced. Though objects and reasons cannot be the ultimate guide in interpretation of statutes, it oftentimes aids in finding out what really persuaded the Legislature to enact a particular provision. The objects and reasons here clearly spell out that delay in the implementation of the awards is due to the contests by the employer which consequently cause hardship to the workmen. If this is the object, then would it be in keeping with this object and consistent with the progressive social philosophy of our laws to deny to the workmen the benefits of this section simply because the award was passed for example, just a day before that section came into force ? In our view, it would be not only defeating the rights of the workman but going against the spirit of the enactment. A rigid interpretation of this section, as is attempted by the learned counsel for the respondents, would be rendering the workman worse off after the coming into force of this section. This section has in effect only codified the rights of the workmen to get their wages which they could not get in time because of the along drawn out process caused by the methods employed by the management. This section, in other words, gives a mandate to the Courts to award wages if the conditions in the section are satisfied."
The Supreme Court also noticed that the Courts awarded wages to workmen when they felt such a direction was necessary even before S. 17B was enacted and observed in Para 8 (p. 220) :
"... that was only a discretionary remedy depending upon Court to Court. Instances are legion where workmen have been dragged by the employers in endless litigation with preliminary objections and other technical pleas to tire them out. A fight between a workman and his employer is oftentimes an unequal fight. The Legislature was thus aware that because of a long pendency of dispute in Tribunals and Courts, on account of the dilatory tactics adopted by the employer, workmen had suffered. It is against this background that the introduction of this section has to be viewed and its effects considered."
8. While going into the vires of S. 17B and holding that it is wholly reasonable and has been enacted to achieve the avowed object of protecting the employees from the hardship resultant from unemployment a Division Bench of the Bombay High Court in Elpro International, Ltd. v. K. B. Joshi and others (1987-II-LLJ-210) said in Paras 6 and 7 (p. 214) :
"6. Such a provision has been made so as to enable the employee to survive during the pendency of the litigation and reap the fruits of the order of reinstatement. These wages are to be paid if certain conditions are satisfied. Section 17B read with proviso, in clearest terms lays down as to when workman is entitled to get these wages. Therefore, it cannot be said that the said provisions is either vague or arbitrary. It operates within the specified limits and, therefore, in our view the challenge to the said section abased on Art. 14 of the Constitution must fail.
7. It is no doubt true that no provision is made as to what will happen to the amount paid under S. 17B, if untimately the employer succeeds in the litigation. In our view absence of such a provision will not make the section either vague or arbitrary ..."
The Court found a parallel to this in Section 10A of the industrial Employment (Standing Orders) Act, 1946, and observed in Para 7 (pp. 214-215) :
"The amount paid towards subsistence allowance is neither refundable nor recoverable irrespective of the result of the enquiry. The reason is obvious. The allowance contemplated to be paid under the said section it nothing but a subsistence allowance. Similarly what is to be paid under S. 17B is also in the nature of the subsistence allowance. The expression "inclusive of any maintenance allowance admissible to him under any rule" is indicative of legislative intent. The wages payable during the pendency of the proceedings in the High Court or Supreme Court are at the rate of the wages last drawn by him. The proviso further lays down that where it is proved to the satisfaction of the High Court or the Supreme Court that such workman had been employed and had been receiving adequate remuneration during any such period or part thereof, the Court shall order that no wages shall be payable under this section for such period or part thereof as the case may be. The payment of wages will be obviously on month to month basis, or on the basis of the practice followed by concerned industry or factory, therefore, on that ground, it cannot be said that the provision is in any way vague or arbitrary and, therefore, in our view the challenge based on that count also must fail."
Coming to the question whether S. 17B interfered or encroached upon the constitutional powers of the High Court or the Supreme Court under Art. 226 or Art. 136 of the Constitution of India, the Bombay Court said in para 8 (p. 215) :
"So far as the challenge to S. 17B of the Act based on the ground that it either interferes or encroaches upon the Constitutional powers of the High Courts or the Supreme Court is concerned, from the bare reading of this section it is clear that it does not even remotely refer to the powers of the Courts under Art. 136 or Art. 226, much less of restricting the said powers. This section only guarantees to the workman the payment of wages by the employer during the payment of wages by the employer during the pendency of the proceedings before the High Court or the Supreme Court, and that too subject to the conditions laid down by the said section and the proviso, irrespective of the result of the proceedings. It also impose an obligation upon the workman concerned to file an affidavit before the Court stating that he has not been employed in any establishment during the pendency of the proceedings. It also absolve the employer of his obligation to pay such wages, if he is able to prove to the satisfaction of the Court that the workman had been otherwise employed and had been receiving adequate remuneration. As already observed, S. 17B operates within a limited sphere. Its operation is subject to conditions laid down by the section itself. Section nowhere lays down that in extreme cases where it is demonstrated that the award passed is either without jurisdiction or is otherwise nullity, or grossly erroneous or perverse, the High Court or the Supreme Court is debarred from exercising its powers under Arts. 226 and 136 of the Constitution. Therefore, it is not possible for us to accept the contention that S. 17B is void as it encroaches upon or overrides the powers of the High Courts or the Supreme Court of India under Arts. 226 and 136 of the Constitution of India. The powers of the High Courts or the Supreme Court Art. 226 and 136 of the Constitution are paramount and S. 17B does not interfere nor restrict the said Constitutional powers."
9. A Division Bench of this Court in V. A. Unnis v. M. A. Khizar Hussain and Sons (1987-II-LLJ-484), like the judgment in writ appeal No. 1009 of 1988 of course, without there being any other contention as to the constitutional vires of the section or whether it interferred with the jurisdiction or the High Court under Art. 226 of the Constitution or that of the Supreme Court under Art. 136 of the Constitution, made some observations as to the effect of this section in a case in which a leaned Single Judge of this Court had directed the workman to work out his remedies in the light of S. 17B of the Act saying that there was nothing in if to suggest that the High Court should direct the management to pay full wages last drawn by the workman. The Bench observed in Para 1 (p. 485) :
".. Obviously, the learned Judge had in mind the proceedings under S. 33C(2) of the Act. Forcing the employee to work out his rights by a separate proceeding would be contrary to the spirit and the purpose of S. 17B of the Act which is introduced by Act 46 of 1982, brought into force with effect from 21 August, 1984. A bare reading of the provisions of S. 17B of the Act will show that in a case where an award directing reinstatement of the workman, if challenged by the employer, the employer shall be liable to pay such workman during the period of pendency of such proceedings in the High Court or the Supreme Court, full wages last drawn by him inclusive of any maintenance allowance admissible to him under any rule if the workman had not been employed in any establishment during such period and an affidavit by such workman had been filed to that effect in such Court. Section 17B speaks of the liability of the employer during the pendency of the proceedings in the High Court or the Supreme Court. The affidavit stating that the workman had not been employed during the period of pendency of the proceedings in the High Court or the Supreme Court, has to be filed in the High Court or Supreme Court, as the case may be. The purpose of being required to file such an affidavit is to enable the High Court to make an order of payment of full wages last drawn by the employee during the pendency of the proceeding in the High Court. The provision in S. 17B is, therefore, intended to be invoked in the course of the proceeding sin the high Court and the High Court is entitled to make on order as contemplated by S. 17B in the proceedings, taken by the employer challenging the order of the Labour Court in the High Court. It is thus clearly permissible for the High Court to make an order requiring the employer to comply with the provision of S. 17B of the Act. It would be extremely hard and contrary to the spirit of S. 17B to force an employee to seek remedy elsewhere separately to recover wages permitted to be claimed under S. 17B of the Act by an application under S. 33C(2) of the Act. In our view, the employee was clearly entitled to an order under S. 17B of the Act."
10. We have noticed some of the judgments of this Court as well as other Courts in India and the judgment of the Supreme Court in the case of Bharat Singh (supra), to convince ourselves that it would be wholly incorrect to say that this Court's jurisdiction under Art. 226 of the Constitution is in any way inhibited by the provision in S. 17B of the Act. If the award of the Tribunal or a Court is to result in the reinstatement of the workman and the same is challenged before the High Court and the employer seeks avoidance of the implementation of the award on some grounds, the Court will have the competence and the power to stay the implementation of the award. Courts in India have been interferring with the orders of reinstatement on the basis of certain known principles of law, such as no unwanted employee should be thrust upon the employer, etc., but always taking notice of the hardship and the plight of the workman who, in spite of the award, is made to wait for a long period due only to the litigation raised in the proceeding under Art. 226 of the Constitution of India. If the implementation of the award is stayed by the Court, the workman is left with no employment and consequently emoluments including the salary. The hardship he oftentimes suffers is immense though measurable in terms of money, yet not worthy of compensation, for, on emoluments received each month depended his life and his family's survival; with no money paid the workman will have no means to procure provisions for himself and his family, provisions essential for their survival and sustenance. Section 17B takes notice of all these and states in no uncertain terms that the employee shall be liable to pay such workman during the period of pendency of such proceeding in the High Court or the Supreme Court wages last drawn by him inclusive of any maintenance allowance admissible to him under any rule with the exception that if during this period of any part thereof he was gainfully employed elsewhere, he would not be entitled to such wages for the period of gainful employment. In recognising the liability of the employer to pay to the workman wages at the rate last drawn by him, it has in fact recognised the right of the workman under his contract of service to receive adequate remuneration, a right no Court can ever afford to ignore. It is in that sense, we think, the Supreme Court in Bharat Singh case (supra), has said in Para 10 (p 220) :
"This section, in other words, gives a mandate to the Courts to award wages if the conditions in the section are satisfied."
11. Consensus of judicial opinion is that there is no vice in the rule enshrined in S. 17B of the Act inasmuch as it is not unconstitutional and although it does not in fringe or makes inroad in any manner into this Court's power under Art. 226 of the Constitution of India, it creates a liability upon the employer and conversely, a right in the workman to pay and receive wages last drawn by him inclusive of any maintenance allowance admissible to him under any rule during the period of pendency of the proceedings in the Court with the exception that if during this period or any part thereof he was gainfully employed elsewhere, he would not be entitled to such wages for the period of gainful employment. In Chitram and Co., Ltd. case (supra), it has been rightly stated by a Division Bench of this Court that S. 17B cannot be construed as in any manner taking away or fettering the plenary powers of the High Court under Arts, 226 and 227 of the Constitution of India, to make appropriate orders taking note of the relevant facts. That appropriate order will invariably to be the aid of the workman for payment of full wages pending proceedings in the Court unless the award is demonstrated to be a nullity or made without jurisdiction. The unfettered power of the Court under Art. 226 of the Constitution cannot be used to destroy the statutory right granted to a workman under S. 17B of the Act, i.e. a right pendent lite which has been recognised, as we have seen, to remove the hardship and to protect the interests of the workman. The workman cannot be left uncared to suffer a total deprivation of wages merely because of the employer has chosen and accordingly initiated a proceeding under Arts. 226 and 136 of the Constitution of India. This beneficial legislation that operates within a limited sphere is subject to conditions laid down by the section itself and that the section nowhere lays down that in extreme cases where it is demonstrated that the award passed is either without jurisdiction or is otherwise a nullity, the High Court or the Supreme Court is debarred from exercising its powers under Arts. 226 and 136 of the Constitution.
12. Before we conclude and answer the reference, we feel constrained to observe that any challenge of the award on the ground that it is without jurisdiction or is otherwise a nullity alone will not be sufficient to suspend the operation of S. 17B of the Act. The final adjudication in a case where the award is without jurisdiction or is otherwise a nullity shall ordinarily meet the ends of justice. The workman, who shall be waiting for the implementation of the award during the pendency of the proceedings, however, shall receive only the wages at the rate last paid for the period of the pendency of the proceeding in the Court. It is not a burden of any serious consequence upon the employer, but will be a deprivation of a sort which may caused have to the workman and his family. If we proceed on the footing that the Court's power to make the final order includes the power to make an interim order, then we may say, the power will extend to suspending the liability of the employer under S. 17B of the Act and accordingly the right of the workman to receive wages pendente lite. But, this will be possible in the rarest of the rare cases. Otherwise, it will defeat the very purpose for which this section has been introduced in the Act. There shall be any number of employers/managements, who shall successfully contrive petitions and proceedings challenging the award on some such grounds as the award being without jurisdiction or a nullity. Courts cannot afford to be manipulated and allow the management/employer to use the interim order as we weapon to avoid such a statutory liability. Some error of fact or even some error of law alone will not thus be enough to issue any interim order. If, however, the error is such that goes to the root of the jurisdiction of the Tribunal and the Court has got sufficient materials to ignore the effect of S. 17B of the Act, the Court may decline to order payment of the wages pendente lite. The Bombay High Court in the case of Elpro International Ltd. v. K. B. Joshi and Others (supra), has indicated this caution in the words, in Para 8 (p. 215) that :
"... Extreme cases where it is demonstrated that the award passed is either without jurisdiction or is otherwise a nullity ..."
the Court can decline to make an order in terms of S. 17B of the Act. The words "or grossly erroneous or perverse" in that judgment and in the judgment of the Division Bench of this Court in Chitram and Company (supra), have to be understood only to mean illustratively when the Court may treat the award a nullity.
13. We thus answer the reference as follows (1) Section 17B of the Act does not in any manner impair or interfere with the powers of the High Court under Art. 226 of the Constitution of India and the Court still possesses the discretion to go into the question and award a lesser amount than the exact quantum of last drawn wages. The court shall, however, honour the statute and if the three conditions, namely :
(1) the Labour Court directed reinstatement of the workman;
(2) the employer preferred proceedings against the award of reinstatement in the Court; and (3) the workman had not been employed in any establishment during the pendency of the proceedings.
are satisfied, the Court shall exercise its powers under Art. 226 of the Constitution of India to order that the employer would pay to the workman during the period of pendency of the proceedings in the Court, full wages last drawn by him inclusive of any maintenance allowance admissible to him under any rule. This, however, will be subject to the workman filing an affidavit that he had not been gainfully employed during such period. In case he is found gainfully employed in any other establishment, the Court shall accordingly order for no wages to be paid for such period of gainful employment or less wages to be paid, depending upon the nature of the gainful employment.
(2) the Court may make a different order and depart from the above rule only in the extreme cases where it is demonstrated that the award is passed either without jurisdiction or is otherwise a nullity. The Court, however, shall be slow and cautious in accepting such allegations of the employer and except in the rarest of the rare cases, it shall implement the law and grant to the workman wages at the rate last drawn by him inclusive of any maintenance allowance admissible to him under any rule except for the period during which he is found to have been gainfully employed elsewhere.