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Mahadev (D.) Vs. Muniswami (K.) - Court Judgment

LegalCrystal Citation
SubjectLabour and Industrial
CourtKarnataka High Court
Decided On
Case NumberWrit Petition No. 736 of 1963
Judge
Reported in[1966(12)FLR55]; (1966)ILLJ838Kant; (1965)2MysLJ376
ActsIndustrial Disputes Act, 1947 - Sections 2, 10(1), 25C, 25F, 25G and 33C(2)
AppellantMahadev (D.)
RespondentMuniswami (K.)
Excerpt:
.....and that clearly is not permissible. 33c(2) clearly postulates that the determination of the question about computing the benefit in terms of money may, in some cases, have to be preceded by an enquiry into the existence of the right and such an enquiry must be held to be incidental to the main determination which has been assigned to the labour court by sub-section (2). as maxwell has observed :where an act confers a jurisdiction, it impliedly also grants the power of doing all such acts, or employing such means, as are essentially necessary to its execution. 33c(2). but, if the workman does not rely on an existing right, but seeks to make good his claim under the industrial law which can create new rights for him, as a result of which only the claim can be awarded to him, them he..........(1) and it is pointed out that just as under sub-section (1) any disputed question about the workman's right to receive the money due under an award cannot be adjudicated upon by the appropriate government, so under sub-section (2), if a dispute is raised about the workman's right to receive the benefit in question, that cannot be determined by the labour court. the only point which the labour court can determine is one in relation to the computation of the benefit in terms of money. we are not impressed by this argument. in our opinion, on a fair and reasonable construction of sub-section (2) it is clear that if a workman's right to receive the benefit is disputed, that may have to be determined by the labour court. before proceeding to compute the benefit in terms of money the.....
Judgment:
ORDER

Hegde, J.

1. In this writ petition under Art. 226 of the Constitution, the petitioner prays that this Court may be pleased to send for the records ending with the order of the presiding officer, labour court, Bangalore, in Application No. 30 of 1962 on his file, by issuing a writ of certiorari and quash the order in question.

2. Sri G. S. Ullal, the learned counsel for the petitioner, contended that the impugned order is liable to the struck down for two reasons, namely,

(i) the labour court had no jurisdiction to go into the facts of retrenchment as the same was a disputed question; and

(ii) the retrenchment put forward by the respondent, on the admitted facts of the case, does not amount to a retrenchment in law and therefore no retrenchment compensation could have been granted.

3. It is unfortunate that the respondent was not represented in this case.

4. The facts found by the labour court are these : The respondent was working as a weaver under the petitioner ever since 20 August 1958. On 3 April, 1962, the petitioner issued a notice to the respondent, intimating that the management of the petitioner's firm had decided to retrench him with effect from 6 April 1962 as his services were found to be surplus. By means of that notice they offered to pay him Rs. 113.75 in lieu of month's notice required under law. They further offered him to pay Rs. 227.48 as retrenchment compensation for four years at the rate of fifteen days' average wages per yea of service. In all they offered him to pay a sum of Rs. 341.25. But, on 7 April, 1962, the petitioner issued another notice to the respondent withdrawing the notice issued by it on 3 April, 1962. As per that notice, the petitioner called upon the respondent to continue to serve under it. The respondent took the stand that he had already been retrenched and therefore he is entitled to the retrenched compensation as provided under law.

5. As the petitioner failed to pay him the compensation claimed by him, the respondent approached the labour court under S. 33C(2) of the Industrial Disputes Act, 1947, to be hereinafter referred to as the Act, for determining the retrenchment compensation due to him. Before the labour court, the respondent claimed a sum of Rs. 485. The petitioner resisted the claim contending inter alia that the respondent had not been retrenched, the question of retrenchment being a disputed question, the labour court had no jurisdiction to go into that question and under any circumstances the purported retrenchment being not valid in law, as the same did not conform to the requirements laid down in S. 25F of the Act, no retrenchment compensation can be granted to the respondent. The petitioner also joined issue on the question of quantum of compensation payable to the respondent.

6. The labour court came to the conclusion that under S. 33C(2) of the Act it had jurisdiction to go into the question whether in fact the respondent had been retrenched or not. It further came to the conclusion that though the retrenchment effected is not in accordance with S. 25F, the petitioner is precluded from questioning the validity of that retrenchment and that being so, he is liable to pay the retrenchment compensation, payable under law. As regards the quantum of compensation it held that only a sum of Rs. 341.23 - the very sum that the petitioner had originally offered to pay - was due from the petitioner to the respondent.

7. The first question that falls for decision is whether the labour court had jurisdiction to go into the question whether the respondent had been retrenched by the petitioner. According to Sri Ullal, as the petitioner had disputed the factum of retrenchment, the labour court had no jurisdiction to go into that question. His contention was that a proceeding under S. 33C(2) is in the nature of an execution proceeding and hence the labour court can only determine a claim for retrenchment compensation if the factum of retrenchment is admitted or undisputed. Is this contention correct

Section 33C(2) says :

'Where any workman is entitled to receive from the employer any benefit which is capable of being computed in terms of money, the amount at which such benefit should be computed may, subject to any rules that may be made under this Act, be determined by such labour court as may be specified in this behalf by the appropriate Government, and the amount so determined may be recovered as provided for in Sub-section (1).'

8. The language of that sub-section does not justify the interpretation that the words 'entitled to receive' found therein mean 'admittedly entitled to receive.' The scope of this clause had been considered by the Supreme Court in Central Bank of India, Ltd. v. Rajagopalan (P.S.) and others [1963 - II L.L.J. 89], Gajendragadkar, J. (as he then was), speaking for the Court, observed thus :

'Let us then revert to the words used in S. 33C(2) in order to decide what would be its true scope and effect on a fair and reasonable construction. When Sub-section (2) refers to any workman entitled to receive from the employer any benefit there specified, does it mean that he must be a workman whose right to receive the said benefit is not disputed by the employer According to the appellant, the scope of Sub-section (2) is similar to that of Sub-section (1) and it is pointed out that just as under Sub-section (1) any disputed question about the workman's right to receive the money due under an award cannot be adjudicated upon by the appropriate Government, so under Sub-section (2), if a dispute is raised about the workman's right to receive the benefit in question, that cannot be determined by the labour court. The only point which the labour court can determine is one in relation to the computation of the benefit in terms of money. We are not impressed by this argument. In our opinion, on a fair and reasonable construction of Sub-section (2) it is clear that if a workman's right to receive the benefit is disputed, that may have to be determined by the labour court. Before proceeding to compute the benefit in terms of money the labour court inevitably had to deal with the question as to whether the workman has a right to receive that benefit. If the said right is not disputed, nothing more needs to be done and the labour court can proceed to compute the value of the benefit in terms of money, but if the said right is disputed, the labour court must deal with that question and decide whether the workman has the right to receive the benefit as alleged by him and it is only if the labour court answers this point in favour of the workman that the next question of making the necessary computation can arise. It seems to us that the opening clause of Sub-section (2) does not admit of the construction for which the appellant contends unless we add some words in that clause. The clause 'where any workman is entitled to receive from the employer any benefit' does not mean 'where such workman is admittedly, or admitted to be, entitled to receive such benefit.' The appellant's construction would necessarily introduce the addition of the words 'admittedly, or admitted to be' in that clause, and that clearly is not permissible. Besides, it seems to us that if the appellant's construction is accepted, it would necessarily means that it would be at the option of the employer to allow the workman to avail himself of the remedy provided by Sub-section (2), because he has merely to raise an objection on the ground that the right claimed by the workman is not admitted to oust the jurisdiction of the labour court to entertain the workman's application. The claim under S. 33C(2) clearly postulates that the determination of the question about computing the benefit in terms of money may, in some cases, have to be preceded by an enquiry into the existence of the right and such an enquiry must be held to be incidental to the main determination which has been assigned to the labour court by Sub-section (2). As Maxwell has observed :

'Where an Act confers a jurisdiction, it impliedly also grants the power of doing all such acts, or employing such means, as are essentially necessary to its execution.' We must accordingly hold that S. 33C(2) takes within its purview cases of workmen who claimed decision of a Bench of this Court in they are entitled should be computed in terms of money, even though the right to the benefit on which their claim is based is disputed by their employers. Incidentally, it may be relevant to add that it would be somewhat odd that under Sub-section (3), the labour court should have been authorized to delegate the work of computing the money value of the benefit to the Commissioner if the determination of the said question was the only task assigned to the labour court under Sub-section (2). On the other hand, Sub-section (3) becomes intelligible if it is held that what can be assigned to the Commissioner includes only a part of the assignment of the labour court under Sub-section (2).'

9. But, it was made clear in the course of the judgment that in dealing with a case under S. 33C(2) of the Act it must be borne in mind that cases which fall within S. 10(1) of the Act, for instance, cannot be brought within the scope of S. 33C(2).

10. When there is an existing right either under a contract or law, under which the workman is entitled to receive from the employer any benefit which is capable of being computed in terms of money, the amount due to the workman may be computed under S. 33C(2). But, if the workman does not rely on an existing right, but seeks to make good his claim under the industrial law which can create new rights for him, as a result of which only the claim can be awarded to him, them he cannot resort to S. 33C(2). In such a case he must have recourse to S. 10(1). In the instant case, the respondent's case is that he is entitled to retrenchment compensation under S. 25F. That is a right conferred on him by law. Such a right need not rest on any decision of a tribunal. That being so, all that the labour court had to see was whether there was a retrenchment and if so, what is the compensation due to him under S. 25F.

11. In support of his contention that the claim put forward by the respondent raises a disputed question of fact, namely, whether the respondent had been retrenched or not and therefore, the labour court had no jurisdiction to go into the same, Sri Ullal relied on the decision of a Bench of this Court in Vithal Parappa Murari v. President, Athani Municipality, and another [1964 - I L.L.J. 691], to which one of us was a party. The petitioner therein was a peon under the respondent in that case. The employer retrenched his services. His contention was that he was retrenched in contravention of S. 25G of the Act. The employer contended that his services were properly terminated and the same was done in accordance with the provisions contained in S. 25G. The question for decision was whether his termination was in accordance with S. 25G. This High Court held that that was a question which cannot be gone into a proceeding under S. 33C(2). We do not think that that decision is of any assistance to Sri Ullal. On the to her hand, the decision of the Supreme Court referred to earlier makes it abundantly clear that the dispute of the type, which we are considering in this case, can and ought to be determined in a proceeding under S. 33C(2).

12. This takes us to the next question whether the respondent was validly retrenched. The labour court came to the conclusion, in our opinion rightly, that the retrenchment in question was an invalid one as the same was not effected in accordance with the Provisions contained in S. 25F. Section 25F lays down certain conditions precedent to retrenchment. It provides that no workman employed in any industry who has been in continuous service for not less than one year under an employer shall be retrenched by that employer, until

(a) the workman has been given one month's notice in writing indicating the reasons for retrenchment and the period of notice has expired or the workman has been paid, in lieu of such notice, wages for the period of the notice;

(b) the workman has been paid, at the time of retrenchment, compensation which shall be equivalent to fifteen days' average pay for every completed year of service or any part thereof in excess of six months; and

(c) notice in the prescribed manner is served on the appropriate Government.

13. In the instant case, the petitioner has not complied with the conditions precedent laid down in S. 25F. He had purported to retrench the respondent forthwith. He had not paid him wages in lieu of the notice contemplated by S. 25F(a); nor had he paid him compensation due under Clause (b) of S. 25F; nor had he given notice to the Government as required by S. 25F(c). Under these circumstances, it has to be held that the retrenchment in question was an invalid retrenchment.

14. In State of Bombay v. Hospital Mazdoor Sabha [1960 - I L.L.J. 251] the Supreme Court laid down that on a plain reading of S. 25F(b) it is clear that the requirement prescribed by it is a condition precedent for the retrenchment of the workman and noncompliance with the said condition renders the impugned retrenchment invalid and inoperative.

15. That is also the view taken by the Gujarat High Court in Ambalal Shivlal v. D. M. Vin and others [1964 - II L.L.J. 271].

16. The only question that remains to be considered is whether the petitioner who purported to retrench the respondent can now be permitted to contend that the retrenchment purported to have been effected by him is invalid and inoperative and therefore he is not liable to pay retrenchment compensation.

17. Relying on the decision of the Gujarat High Court in Ambalal case [1964 - II L.L.J. 271] referred to earlier, it was urged on behalf of the petitioner that unlike S. 25C of the Act, S. 25F itself does not create any right in favour of an employee to receive, nor does it impose any obligation upon an employer to give, retrenchment compensation. It was said that all that S. 25F provides is that no retrenchment can be effected unless the conditions precedent laid down in S. 25F are fulfilled. If these conditions are not fulfilled, them in law there is no retrenchment. The workman concerned continues to be in the service of his master and he is entitled to all the rights as a workman. There is no doubt that this contention receives full support from the decision in Ambalal case [1964 - II L.L.J. 271] (vide supra).

18. After having purported to terminate the service of the respondent, is it open now to the petitioner to turn round and say that the retrenchment purported to have been effected by him being an invalid retrenchment, he is not liable to pay retrenchment compensation which he ought to have paid before he retrenched the respondent The term 'retrenchment' has been defined by S. 2(oo) of the Act thus :

''Retrenchment' means the termination by the employer of the service of a workman for any reason whatsoever otherwise than as a punishment inflicted by way of disciplinary action, but does not include -

(a) voluntary retirement of the workman; or

(b) retirement of the workman on reaching the age of superannuation if the contract of employment between the employer and the workman concerned contains a stipulation in that behalf; or

(c) termination of the service of a workman on the ground of continued ill-health.'

19. The termination of the services of the respondent herein is clearly a 'retrenchment' as defined by S. 2(oo).

20. In view of S. 25F, the petitioner before retrenching the respondent had to pay him certain compensation. It is true that the conditions are not fulfilled, the workman may successfully contest the validity of the retrenchment. If those conditions are not fulfilled, the workman may successfully contest the validity of the retrenchment. But an employer who has purported to retrench a worker of his, without fulfilling the conditions laid down in S. 25F, cannot thereafter be permitted to go back on his order of retrenchment on the plea that his order is an invalid order. He cannot be permitted to approbate and reprobate. Validly or invalidly he has retrenched the worker. The retrenched worker is entitled to certain rights under S. 25F. Ordinarily the conditions laid don in S. 25F should be fulfiled before an order of retrenchment is made. But, by the mere fact that those conditions are not fulfilled as conditions precedent to retrenchment, the worker's right to get the compensation due under S. 25F cannot be defeated.

21. A contention similar to that of the petitioner herein came up for consideration before the Madras High Court in Desikachari v. The 'Mail' [1961 - II L.L.J. 771]. Dealing with that contention, Ramachandra Ayyar, officiating Chief Justice, speaking for the Court observed thus :

'The labour court has held that, as the procedure prescribed by S. 25F of the Industrial Disputes Act has not been followed by the management, the discharge of the workers would not amount to a retrenchment. 'Retrenchment' has been defined in S. 2(oo) of the Act, and if the requirements of that definition are satisfied the mere fact that the management omitted to follow the procedure prescribed by S. 25F cannot make it any the less a retrenchment. What is necessary to consider first is whether factually there has been a retrenchment. If the procedure prescribed by S. 25F is not followed, it may be that the retrenchment may not affect the worker concerned and he can call into question the propriety of it and pleas that, notwithstanding it he continues in employment. But the effectiveness or otherwise of the order is not relevant on the question whether there is an order. Once it is conceded there is an order, it cannot be held to be non set or at any rate, it would not be open to the employer who passed the order to say that, as he did not follow the prescribed procedure, it is not what it purports to be. But a person affected by the order can in appropriate proceedings challenge it; if he does not do so but accepts it, one must proceed on the basis of the factual existence of the order. The authority cited for the respondent namely, State of Bombay v. Hospital Mazdoor Sabha [1960 - I L.L.J. 251] (vide supra) was a case where the workers impugned the order in an industrial dispute; the clear requirements of S. 25F for retrenchment of workman had not been complied with in that case when the employer purported to retrench them. A dispute was raised by the workers who claimed that they would be entitled to be restored to service. It was held that the retrenchment was invalid. In the present case, the employees do not challenge the propriety of the retrenchment.'

22. We are in respectful agreement with those observations.

23. From the above discussion, it follows that we are unable to agree with the decision of the Gujarat High Court in Ambalal case [1964 - II L.L.J. 271] (vide supra) to the extent that that decision lays down that an employer who had illegally purposed to retrench his worker or workers can when faced with a claim for retrenchment compensation, plead the very illegality committed by him, in his defence, to avoid his liability.

24. For the reasons mentioned above this petition fails and the same is dismissal. As the respondent is not represented is this Court, there will be no order as to costs.


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