Delhi High Court
National Agricultural Cooperative ... vs P.O. Labour Court And Anr on 30 August, 2018
Author: Sangita Dhingra Sehgal
Bench: G.S.Sistani, Sangita Dhingra Sehgal
$~8
* IN THE HIGH COURT OF DELHI AT NEW DELHI
Judgement pronounced on:30th August, 2018
+ LPA 79/2016
NATIONAL AGRICULTURAL
COOPERATIVE MARKETING
FEDERATION OF INDIA ....Appellant
Through Mr Arun Dhiman, Advocate
versus
P.O. LABOUR COURT & ANR ...Respondents
Through Mr. Devesh Singh, ASC,Civil
with Ms. Sukriti Ghai, Adv. for
R-1, Mr. Kittu Bajaj, Adv. for
R-2.
CORAM:
HON'BLE MR. JUSTICE G.S.SISTANI
HON'BLE MS. JUSTICE SANGITA DHINGRA SEHGAL
SANGITA DHINGRA SEHGAL, J
1. Challenge in this appeal filed under Clause X of the Letters Patent
Act is to the order dated 28.07.2015 passed by the learned Single
Judge whereby the application filed under Section 17B of the
Industrial Disputes Act, 1947(hereinafter referred to as "the Act")
by the respondent no. 2/Ramesh Kumar seeking direction to the
appellant/Federation to pay wages as per the minimum wages
applicable under the statute was allowed.
LPA 79/2016 Page 1 of 17
2. The brief facts leading to the filing of the present appeal are that
one Ramesh Kumar/respondent No. 2 was appointed by the
appellant/Federation as a casual workman/Mechanic Helper vide
its appointment letter dated 18.01.1994 for the period of three
months on daily wages. The services of the respondent no.2 was
extended from time to time and he was retrenched vide letter
dated 02.02.1996 by the appellant. The respondent no. 2 raised
an industrial dispute claiming illegal termination of his service
by the appellant and preferred a dispute before the labour court
whereby an award dated 16.10.2001 was passed in favour of the
appellant. The relevant portion of the award is produced
hereinafter:-
"18. In that view of the matter, the application is
allowed. The petitioner/management is directed to
pay to the respondent his last drawn wages or
minimum wages which notified by the authorities
from time to time whichever is higher, from the
date of passing of the impugned award till the
pendency of this writ petition provided he files an
undertaking within two weeks that in case the
petitioner succeeds in this writ petition and it is
found that he has received wages in excess amount
to the petitioner/management within four weeks
from the date of passing of the judgement by this
court."
3. Thereafter, an application was moved by the appellant before
the presiding officer for setting aside of the award dated
16.10.2001 but the same was dismissed. Aggrieved, a writ
LPA 79/2016 Page 2 of 17
petition was filed by the appellant for setting aside of the orders
dated 29.01.2005 and 16.10.2001. In the said writ petition, an
application under Section 17B of the Industrial Disputes Act,
1947 was moved by the respondent No. 2, seeking direction to the
appellant/Federation to pay wages as per the minimum wages
applicable under the statute, which was allowed by the learned
Single Judge vide his order dated 28.07.2015. Hence, the present
appeal was preferred by the appellant.
4. Mr Arun Dhiman, the learned counsel for the appellant
strenuously contended that the learned Single Judge committed
error in allowing the application moved by the respondent No. 2
in the writ petition vide order dated 28.07.2015 and that such
findings were based more on hypothetical assumption of vital
and necessary facts, based on mere surmises; that the learned
Single Judge erred in not appreciating the fact that the
respondent No. 2 was self employed, after the termination of his
services in the appellant organisation, as he owned a TATA-407
vehicle in his own name and further deployed his vehicle for
commercial gain; that he also had a driving licence for the said
purpose; that the appellant is not entitled to benefit under Section
17B of the Act as he was self-employed and was receiving
adequate remuneration during such period and would come
within the ambit of "gainful employment in any establishment".
In order to substantiate his case, the learned Counsel for the
appellant has placed reliance in the case of Lumax Automative
LPA 79/2016 Page 3 of 17
Systems Ltd. v. Its workmen represented by Hindustan
Engineering and General Mazdoor Union reported in 2012
SCC Online Del 392, Shriram Institute for Industrial Research
v. Rajesh Kumar Gandhi reported in 2012 SCC Online Del
4593, Suraj & Ors. v. Tata Sons & Ors. reported in 2015 SCC
Online Del 11034 and North East Road Karnataka Road
Transport Corporation v. M. Nagangouda reported in (2007) 10
SCC 765.
5. Per contra, Mr. Kittu Bajaj, learned for the respondent No. 2
contended that there is no infirmity in the order passed by the
learned Single judge; that the vehicle was purchased by the
respondent no. 2's father out of his retirement fund in the name of
respondent No. 2; that the respondent no. 2 is not running any
transport company and the vehicle is given to local drivers to earn
livelihood after retirement; that the amount so earned is not
sufficient to support the entire family; that the respondent no. 2 is
not employed in any establishment after the termination of his
services so as to not claim the benefit under Section 17B of the
Act.
6. We have heard the learned counsels for the parties and perused the
material placed on record.
7. Before delving into the contentions raised by the parties, it is
relevant to produce section 17B of the Act.
"17B. Payment of full wages to workman pending
proceedings in higher courts.- Where in any case, a
Labour Court, Tribunal or National Tribunal by its
LPA 79/2016 Page 4 of 17
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."
The perusal of the above section shows the legislative intendment
to give certain protection to the workman during the pendency of
the proceedings before the High Court or the Supreme Court in
relation to payment of wages. The provisions further show the
liability created by statute upon an employer for payment of such
wages. This entitlement is subject to the proviso to the said section.
The essential ingredients of this provision appears to be:
(a) By its award direct reinstatement of any workman.
(b) The employer prefers any proceedings against such award in
the High Court or Supreme Court.
(c) The employer shall be liable to pay such workman during the
pendency of such proceedings full wages drawn by the workman.
LPA 79/2016 Page 5 of 17
The liability to pay arises if the workman had not been employed
in any establishment during such period and an affidavit to that
effect is filed in Court.
(d) Even if the above conditions exist but it is shown to the
satisfaction of the Court that workman had been employed and
receiving adequate remuneration during any such period or part
thereof then no back wages would be payable for that period.
8. The scope, purpose and legislative intent behind formation of
Section 17B of the Act has been laid down in the case of Delhi
Transport Corporation v Jagdish Chander reported in 120 (2005)
DLT 664, wherein it was held as under:-
10. The emphasis of Legislature is on the expression
'reinstatement' rather than on an 'award'. Where the
workman is reinstated and the Management prefers any
proceedings before the High Court or Supreme Court,
the object appears to be that the workman if he was not
gainfully employed during the relevant period should
not starve and should be able to contest the
proceedings before the Court meaningfully and without
being deprived of the wages which he was entitled to
receive under the terms of the award.
11. Obviously the intention of the Legislature was to
provide definite protection to the workman against the
long litigation and exploitation by the affluent
Management. As such these welfare provisions are
directly relatable to the prescribed benefit to the
workman under various provisions of the statute. The
provisions of the Act have been amended from time-to-
time in light of the experience gained in its actual
working, case law and industrial relation policy of the
Government and while keeping in mind the
recommendations of National Commission of Labour
LPA 79/2016 Page 6 of 17
which had made an in-depth study of the industrial
relations, procedure and had identified number of areas
which needed further amendments. As already
indicated above, the provisions of Section 1(b) of the
Act were inserted by Act 46 of 1982 however, it came
into force with effect from 21st August, 1984.
12. This legislation provides the machinery and
procedure for investigation and settlement of industrial
disputes. The paramount object of the statute was to
promote industrial harmony and expeditious settlement
of industrial disputes. The cumulative effects of all
amendments made to this law from time-to-time are
intended to provide model grievance redressal
procedure with more emphasis on reducing the time
factor in all matters covered under the provisions of the
Act and shorten the various procedures including
voluntary settlement mechanism, conciliation
proceeding, reference and pending proceedings before
various Courts by fixation of time-limits. Another
emphasized aspect of various amendments related to
amelioration of the methodology and entitlement to
receive wages by a reinstated workman. The objects
and reasons which are index to the legislative mind, as
stated in the enactment itself while introducing Section
17-B of the Act, in specific and with some emphasis
refers to the following clause:
"(vi) It is observed that when Labour Courts pass
awards of reinstatement, these are often contested by
an employer in Supreme Court and High Courts. The
delay in the implementation of the award caused
hardship to the workmen concerned. It is, therefore,
proposed to provide for payment of wages last drawn
by the workmen concerned, under certain conditions,
from the date of the award till the case is finally
decided in the Supreme Court or the High Court.
LPA 79/2016 Page 7 of 17
9. In view of the above settled law and keeping in mind the objective
of the said Section, it is relevant in the facts and circumstances of
the present case to adjudicate whether self-employment could be
termed as gainful employment in an establishment as per Section
17B of the Act so as to disentitle workman the benefit under
Section 17B of the Act. In the case of Sh. Rajinder Singh v.
Delhi Transport Corporation reported in 2009 SCC Online Del
1497, it was held as under:-
"10. In the judgment of the apex court reported
in (2008) 9 SCC 486 Talwara Cooperative Credit
and Service Society Ltd.v. Sushil Kumar after taking
into consideration the facts of the case, the Supreme
Court awarded compensation of Rs. 2 lakhs instead
of directing reinstatement with full back wages. In
the present case already the respondent has
complied with the direction given by the Labour
Court by reinstating the petitioner in his
employment and also by making the payment of 25%
of the back wages. The petitioner did not feel
satisfied so far the petitioner was denied the grant of
full back wages. The Labour Court found the
termination of the petitioner from his service being
illegal on the ground that fair and proper
opportunity was not afforded to the petitioner during
the enquiry proceedings and therefore directions
were given for the reinstatement of the petitioner
with continuity of service. It is a trite law that grant
of full back wages is not automatic or a cast iron
rule wherever the termination is held as illegal. It
would depend upon the facts of each case to decide
the payment of back wages and the ratio in which it
should be allowed. The Labour Court granted 25%
of the back wages influenced by the fact that the
petitioner failed to disclose his income earned by
LPA 79/2016 Page 8 of 17
him by selling vegetables. The Labour Court also
found fault with the petitioner as he failed to explain
the source of his sustenance and his family in the
absence of any employment. There cannot be any
doubt that once thrown out of employment the
petitioner still has to sustain himself and his family
members and for which one would undertake petty
jobs not even befitting his status so that he and his
family do not starve or lead the life of destitutes. The
earning through such a source once being out of
employment cannot be considered as a gainful
employment to be equated with the employment from
where he was illegally terminated. Nevertheless, it is
expected of such a petitioner to at least truthfully
state in his statement of claim and also in his
evidence the exact source of his income during the
course of his unemployment so as to enable the
court to grant appropriate relief. Non-disclosure of
such facts or suppression of such facts will certainly
influence the tribunals and courts exercising
discretionary jurisdiction and can be viewed
seriously. However, considering the facts of the
instant case that the petitioner served respondent
DTC for 8 years and his services were wrongfully
terminated and the industrial dispute was answered
in his favour after a long gap of 14 years and also
considering the fact that at the time of reinstatement,
the petitioner was of about 47 years of age, I feel
that the interest of justice would be best served if
50% backwages are awarded to the petitioner."
In the case of Municipal Corporation of Delhi v. Santosh Kumari &
Ors. reported in 2012 SCC OnLine Del 4390, it was held that:-
"36. It is clear from the above that insofar as
application under Section 17B of the ID Act is
concerned, it was filed more than 4½
years of filing of the writ petition. In view of our
LPA 79/2016 Page 9 of 17
above mentioned detailed discussion, the workman
can, at the most, be granted benefit of the wages
under Section 17B of the ID Act from the
date of filing the application. However, whether the
workman be given even this benefit or not depends
upon the outcome of the other plea raised by the
appellant about the gainful employment of the
workman. The provisions of Section 17B of the ID
Act are very clear in this behalf and the legal
position as set addressed in enough judgments,
which is as follows:
Insofar as the workman is concerned, the only
obligation put on him is to file an affidavit to the
effect that he is not gainfully employed elsewhere.
He does not have to prove anything else and the
reason is obvious. No person can asked to give the
proof of negative. Under Section 17B of the ID Act,
it is an impossible for an employee to prove that he
is not gainfully employed. Therefore, the moment
such an affidavit is given by the employee, onus
shifts upon the management contesting the
application and intends to make out a case that the
workman is not entitled to benefit of language under
Section 17B of the ID Act because of this reason. An
important question arises at this stage, viz., what
kind of proof to show the gainful employment is to
be furnished by the employer?
If there is a direct proof and evidence to show that
the workman is under the employment of some other
employer, and such proof is available with the
employer and employer furnishes the same, that
would be clinching. Difficulty, however, arises when
clear-cut proof is not available with the employer,
though some semblance of evidence is furnished,
which would indicate that the workman is employed
somewhere but to arrive at definite finding, some
more reliable evidence is needed. We have come
across the cases where photographs of such a
LPA 79/2016 Page 10 of 17
workman working in some establishments are filed
and even the particulars of the employer are given,
but it is stated by the management that the said
employer with whom the concerned workman is
purportedly employed is not ready to furnish any
proof of the employment. Situation gets more
complicated when the management pleads self-
employment. In such cases also, some
proof of workman running some small scale
business or other such activity is furnished in the
form of photographs or the ownership of shop, etc.
without any further evidence. Invariably, in all such
cases, the management seeks proof against the
employer where the workman is purportedly
working at present to prove the records and state
about the said employment. Managements, in
case of self-employment, also press the Court at
times to summon the final records in the
form of sales tax registration, registration under
Shops and Establishments Act, etc. to find out
whether the workman is doing the business under
the provisions of the said Act. Such moves are
normally resisted on the ground that the Court
cannot hold inquiries into the aforesaid aspects and
to determine and collect evidence on such aspects,
viz., whether workman is working or not. Normally,
such requests are rejected on the ground that the
Court cannot hold inquiry once the workman has
denied any gainful employment or self-employment.
37. We would like to point out at this stage that
many cases have come across where workman
initially doing any employment, but when confronted
with some documentary evidence, they have
accepted gainful employment. There is a tendency
on the part of the workman to deny even when some
semblance of evidence produced by the management
which gives the indication some employment/self-
employment.
LPA 79/2016 Page 11 of 17
38. No doubt, when the employer takes a vague plea
that a workman is gainfully employed without
furnishing any material or in support of this plea,
the employer cannot take the help of the Court
making the Court to undertake the exercise as to
whether the workman is employed or not by
indulging roving & fishing inquiry. We are of the
view that interest of both the parties can be
balanced by calling upon the workman to produce
those documents, which are in exclusive
possession of the workman and when the disclosure
thereof is relevant to delineate the
issue of gainful employment or self-employment. But
it should be done only when the management
produces some evidence in that behalf justifying
further inquiry to know the truth. In such a situation,
it would amount to finding the truth when on the one
hand workman comes with complete denial and on
the other hand, management has secured some
evidence which may point towards the
plausible/gainful employment. Such a course is not
to be resorted to on the ipsi dixit of the management
as no fishing and roving inquiry is to be conducted
by the Court.
39. This, therefore according to us, is the balanced
approach which needs to be adopted by the Court,
viz., it does not amount to become a proof or a tool
for fishing and roving inquiry, but whether the cases
so demand calling upon his workman to produce the
evidence in his possession when on the basis of some
evidence produced by the management, a doubt
arises that workman may be employed and the
affidavit filed by him may not be wholly correct.
40. Examining the present case in this respect, we
find that the reply to the application under Section
17B of the ID Act, it was stated that the workman is
staying in village and therefore, he may be having
agricultural or farming activities or may be
LPA 79/2016 Page 12 of 17
operating a shop. This plea was taken on the
premise that since the workman had been dismissed
from the service more than 15 years again without
any income, it was not possible for him to raise his
family. This was a bald plea taken without even the
semblance of evidence to support the same. Though
we do not entirely agree with the view of the learned
Single Judge that in no case, there can be a
direction to the workman to file bank accounts, etc.
and such a general observation may not be correct
having regard to what we have observed above, in
the facts of this case, we are of the opinion that the
appellant/management could not ask for filing the
bank accounts, etc. unless it had furnished some
evidence to show that the workman was self-
employed either in agriculture activity or was
running a shop. Therefore, in the facts of this case,
we are of the view that the learned Single Judge is
right in holding that no adverse inference can drawn
against the workman for not filing the affidavit.
41. Insofar as merits of the wages are concerned,
viz., the plea of the management that the workman
could not have been given any relief as he had
secured the employment producing the forged
certificate; that aspect touches the merits of the writ
petition and cannot be gone into proceedings under
Section 17B of the ID Act. We, thus, are of the
opinion that the workman is entitled to wages under
Section 17B of the ID Act."
In the case of Management of Connaught v. Om Prakash & Ors.
reported in 2007 SCC OnLine Del 872, it was held as under:-
"17. Now, coming to the second contention that the
respondent was gainfully engaged in self
employment, we have gone through the records.
Considering the records, the learned Single Judge
has given a finding that the respondent was not
LPA 79/2016 Page 13 of 17
gainfully employed in any employment, by
way of engagement with some other establishment.
The learned Single Judge has also held that there is
no sufficient evidence on record to disprove the
statement of the respondent that he is unemployed
since the date of termination from the job. The
learned Single Judge has clearly held that
deposition of the workman that he remained
unemployed since the date of his termination from
the job is unrebutted by the materials placed by
the management/petitioner before this court. The
learned Single Judge also held that
the management has failed to prove that the
workman is gainfully employed. The learned Single
Judge has also referred to the decisions of the
Supreme Court as also of this Court to the effect that
even sporadic employment or intermittent income
has no mitigation from the right of the workman to
subsistence allowance in the form of payment u/s
17B of the Act. Once application under u/s
33(2)(b) of the Act is rejected, the workman
continues to be in service as if no
order of termination was passed. The workman has
to survive and requires money for his day to day
needs.
18. The aforesaid findings arrived at by the learned
Single Judge are findings of fact. There is no other
rebutting evidence to disprove and dislodge the
aforesaid findings of facts. We are not inclined to
accept the second contention raised before us by the
counsel appearing for the appellant. Reliance on the
decision of the Supreme Court in Administrator,
Kamala Nehru Memorial Hospital v. Vinod Kumar,
2006 (1) CLR 253 is misplaced as the facts of the
said case are clearly distinguishable. The said
decision was rendered in the light of the fact that the
workman was working as an advocate having decent
professional income. Such materials are missing in
LPA 79/2016 Page 14 of 17
the present case. The other decision of the Supreme
Court in North East Karnataka Road Transport
Corporation v. M. Nagangouda, JT 2007 (2) SC 265
is also not applicable as the decision was rendered
in the light of sufficient materials on record that the
workman had sufficient income from agricultural
operations.
19. It was submitted that the wife of the respondent
has a business of her own, which is now being
looked after by the respondent. The wife of the
respondent can have her own business or vocation
and the same under no circumstances could become
the vocation or business of the respondent. Besides,
intermittent employment/engagement cannot be said
to be gainful employment in any undertaking. The
second contention is also, therefore, without any
merit and is rejected."
10. Keeping in mind the settled proposition of law and the case laws as
mentioned above, it is seen in the present case that the stand taken
by the appellant are that the respondent No. 2 after the termination
of his service from the Federation/appellant corporation was
gainfully employed. It was stated by the appellant that he owned a
vehicle TATA-407 DL-ILD 5387 in his own name which was used
for commercial gain and also had a driving licence for the same. In
order to substantiate the contentions raised herein, it is pertinent to
observe the affidavit filed by the respondent no. 2. In the affidavit
it has been stated by the respondent no. 2 that the vehicle TATA-
407 bearing No. DL-ILD 5387 was purchased by his father in his
name out of his retirement fund. He has stated that he had never
plied his vehicle or earned any income from it. He has also placed
on record, his passbook as well as the passbook of his father to
LPA 79/2016 Page 15 of 17
prove that all the credit entries in his passbook was because the
amounts were deposited by his father on several occasions to
facilitate payment of instalments of the vehicle. He submitted that
the vehicle so bought was lent on hire to local drivers to earn
livelihood after his father's retirement. The appellant has explicitly
denied any gainful employment in any establishment after the
termination of his service from the appellant corporation. In the
present case, it is seen that there is no evidence adduced to prove
that the respondent no. 2 was gainfully employed in any
employment after the termination of his services from the appellant
corporation. It is also well settled that if the workman after the
termination of his service earns some petty amount to sustain his as
well as his family's livelihood, then it would not amount to gainful
self employment. No sufficient material has been placed on record
to show that the respondent No. 2 was gainfully self- employed in
any establishment. The contentions raised by the appellant is not
sufficient to disprove the statement of the respondent no. 2. Seeing
the factual background of the case, it is understood that the
respondent No. 2 was not gainfully employed in any establishment
after the termination of his services so as to deny him the benefit
under Section 17B of the Act.
11. Accordingly, we find no infirmity in the order dated 19.09.2016
passed by the learned Single Judge. Keeping in mind the
aforesaid facts, this court finds that there is no merit in the
appeal. The appeal, therefore, stands dismissed.
LPA 79/2016 Page 16 of 17
12. Ordered accordingly.
SANGITA DHINGRA SEHGAL, J.
G.S.SISTANI, J.
AUGUST 30 , 2018 //gr LPA 79/2016 Page 17 of 17