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Swastik Manufacturers Ltd. Vs. Labour Court and anr. - Court Judgment

LegalCrystal Citation
SubjectLabour and Industrial
CourtAndhra Pradesh High Court
Decided On
Judge
Reported in(1978)ILLJ154AP
AppellantSwastik Manufacturers Ltd.
RespondentLabour Court and anr.
Excerpt:
.....of affording a quick remedy to the workman would be defeated by the employer merely denying the right of the workman to receive the money or the benefit. the labour court is virtually exercising execution powers and it is well-settled that it is open to the executing court to interpret the decree for the purpose of execution though it cannot go behind the decree nor can it add to or subtract from the provisions of the decree. it was held that this clearly raised the question whether there was retrenchment of workman and such a dispute is exclusively within the competence of the industrial tribunal and is not within the competence of the labour court. that question would involve consideration of several factors and an investigation into them would be clearly outside the speedy remedy..........the decision in central bank of india ltd. v. rajagopalan, (supra) it was observed that where the right to retrenchment compensation which is the foundation of the claim is itself a matter which is exclusively within the competence of the industrial tribunal to be adjudicated upon on a reference, it would be straining the language of section 33c(2) to hold that question whether there has been retrenchment may be decided by the labour court. where retrenchment is conceded and the only matter in dispute is that no liability to pay compensation has arisen the labour court will be competent to decide the question. in such a case the question is one of computation and not of determination of the conditions precedent to the accrual of liability. where, however the dispute is whether work-men.....
Judgment:

Alladi Kuppuswami, J.

1. The petitioner in these two writ petitions is a factory in Secunderabad. The second respondent in each of the cases is a workman in the factory. They filed two petitions, M.P 88/75 and M.P. 89/75 before the Labour Court, Hyderabad under Section 33C(2) of the Industrial Disputes Act claiming monetary benefits to which they were entitled. Their case was that they were retrenched from services by an order dated 17-1-1975 which was given effect to from 20-1-1975. The petitioner in M. P. No. 88/75 claimed retrenchment compensation of Rs. 1,575, leave salary of Rs. 168, Rs. 210 towards minimum bonus for the year 1974-75, Rs. 213 as unpaid dearness allowance and Rs. 14 being unpaid wages for two days during the month of January 1975. The Labour Court awarded a sum of Rs. 1,998 made up of Rs. 1,575 as retrenchment compensation, Rs. 210 as bonus, Rs. 213 towards dearness allowance from April, 1974 to January, 1975 and rejected the rest of the claim. In M.P. 89/75 the petitioner claimed Rs. 1,445 towards retrenchment compensation. Rs. 136 towards leave salary. Rs. 170 being the minimum bonus for the year 1974-75, Rs. 117 as dearness allowance for the period April, 1974 to January, 1975 and Rs. 5-50 being unpaid wages for 18-1-75. The petitioner herein resisted the petitions before the lower Court mainly on the ground that the workmen had not been retrenched but they left the services of their own accord. According to the petitioner, the company was in serious financial difficulties in the middle of 19/4 due to which its activities came to a standstill and even the salaries of workmen could not be paid. The company could not also pay the arrears of Provident Fund, Employees' State Insurance remittances. It had exhausted all its resources from which it could procure money. At this stage Sri R. Suryanarayana Rao who is also an employee of the respondent-company and who is the present managing director of the company offered to finance the company and save it from going into liquidation, thereby also helping his co-workers. In this regard he had discussions with all the workers and it was agreed by all the workers including the petitioners before the Labour Court that they would leave the services of the company of their own accord provided they were paid the arrears of bonus and salary immediately and arrangements were made to pay the gratuity and the management agreed to the said proposals and all the workers were paid accordingly. The petitioner in M.P. 88/75 was paid Rs. 1,926-59 on 1-2-1975 and passed a receipt. The said amount was received by the said workman in full and final settlement of all his claims. The petitioner in M.P. No. 89/75 was similarly paid Rs. 1,633-11. In these circumstances it was submitted that there was no retrenchment but the workmen left the services of their own accord and hence the workmen concerned were not entitled to retrenchment compensation or any other amounts under Section 33C(2) of the Industrial Disputes Act.

2. The Labour Court held that the petitioners had been retrenched from service and this was not a case where they themselves left the services of the company of their own accord. The Labour Court then proceeded to determine the amounts under the various heads to which the workmen were entitled and awarded the benefits as referred to earlier.

3 The petitioner herein has filed these two writ petitions praying for the issue of a writ of certiorari to quash the orders of the Labour Court in each of the two petitions in M.P. Nos. 88 and 89/75.

4. Sri A. Krishnamurthy, learned Counsel for the petitioner contended that the jurisdiction of the Labour Court under Section 33C(2) would be attracted only if there was a retrenchment of the workmen by the company and it would have no jurisdiction if the workmen left the service of their own accord, As this very question on which the jurisdiction depends is a matter of dispute, the Tribunal ought not to have entertained the petition under Section 33C(2) and should have rejected it as not maintainable. The Tribunal should have held that the proper remedy of the workmen concerned was to raise a dispute about their retrenchment and have the matter referred to the Industrial Tribunal'. It was only if in such proceedings the Industrial Tribunal held that it was a case of retrenchment, the workmen concerned would be entitled to approach the Labour Court for payment of the benefits under Section 33C(2) of the Industrial Disputes Act. The Labour Court had only jurisdiction to compute the sum of its to which the workmen would be entitled and it had no jurisdiction to go into the question whether there was a retrenchment entitling them to such benefits.

5. Sri Krishnamurthy further contended that even if the Labour Court had jurisdiction to go into the question whether the workmen had been retrenched or whether they left the service of their own accord, having regard to the circumstances of the case, it should have held that there was no case of retrenchment. The finding of the Tribunal is contrary to law inasmuch as it is opposed to the clear admission of the workmen and other evidence in the case.

6. In any event he contended that the direction to pay the bonus was illegal as even according to the workmen the bonus had not been declared and the bonus would be payable only as and when it was declared.

7. In considering the first contention, namely, that the Labour Court had no jurisdiction to entertain the petition under Section 33C(2), as even the fact of retrenchment on which the application is based is not admitted by the employer, it would be useful to set out the Section 33C(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 amount of money due or as to the amount at which such benefit should be computed, then the question may be decided by the Labour Court.

8. It is clear from the terms of the section, that it postulates that the workman is entitled to receive money or benefit. It is only then he may apply to the Labour Court, to decided the question as to the amount of money due or as to the amount at which such benefit should be computed. It is, therefore, argued on behalf of the petitioner that the only jurisdiction of the Labour Court under this section is to compute the amount of money due or the benefit when there is a dispute about its computation. The Labour Court has no jurisdiction to go into the question whether the workman is entitled to that money or benefit when the very right to receive the money or benefit is disputed. On the other hand, it is contended by the employee that an employer cannot circumvent the provisions of this section by merely denying the right of the workman to receive the money or the benefit. If there is such a denial, it is open to the Labour Court to go into the question and find out whether the workman is entitled to receive money or the benefit. Such a matter is incidental to the question to be decided by the Labour Court, namely, the amount of the money due or the benefit.

9. The matter is not free from difficulty. On the one hand it would appear that if the contention of the employer is accepted, the very purpose of this provision of affording a quick remedy to the workman would be defeated by the employer merely denying the right of the workman to receive the money or the benefit. On the other hand if the employee's contention is to prevail it may result in enlarging the jurisdiction of the Labour Court and confer upon it the powers of an Industrial Tribunal to decide whether the workman is entitled to receive the money or the benefit.

10. The Supreme Court had to consider in a number of decisions the conflicting points of view regarding the scope and jurisdiction of the Labour Court under Section 33C(2) and a few of them may be referred to.

11. In Central Bank of India v. Rajagopalan 1963--II L.L.J. 89; it was held that while care must be taken not to exclude cases which legitimately fall within the purview of Section 33C of the Industrial Disputes Act, it must also be borne in mind that cases which fall within Section 10(1) of the Act for instance cannot be brought within the scope of Section 33C. When Sub-section (2) of Section 33C refers to any workman entitled to receive from the employer any benefit it does not mean that he must be a workman whose right to receive the said benefit is not disputed by the employer. Section 33C(2) takes within its purview cases of workmen even though the right to the benefit on which their claim is based is disputed by their employers. 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. The Labour Court is virtually exercising execution powers and it is well-settled that it is open to the executing Court to interpret the decree for the purpose of execution though it cannot go behind the decree nor can it add to or subtract from the provisions of the decree. The Supreme Court further observed that 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 such benefit'. If that construction is accepted it would necessarily mean that it would be at the option of the employer to allow the workman to avail himself of the remedy 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. At the same time they observed that the construction should not be so broad as to bring within the scope of Section 33C cases which would fall under Section 10(1). The policy of the Legislature in enacting Section 33C was to provide a speedy remedy to workman to enforce his existing right and hence cases which fall under Section 10(1) of the Act for instance cannot be brought within the scope of Section 33C. As an illustration the Supreme Court said that if an employee is dismissed or demoted and it is his case that the dismissal or demotion is wrongful it would not be open to him to make a claim for the recovery of his salary or wages under Section 33C(2). Similarly if a settlement had been reached it would not be open to an employee to claim a benefit notwithstanding the settlement. In U.P. Elec. Supply Co. v. R.K. Shukla : (1969)IILLJ728SC , while the workmen contended before the Labour Court that they were retrenched the company contended that they had voluntarily abandoned the employment because they found it more profitable to take up employment under the Board. It was held that this clearly raised the question whether there was retrenchment of workman and such a dispute is exclusively within the competence of the Industrial Tribunal and is not within the competence of the Labour Court. After referring to the decision in Central Bank of India Ltd. v. Rajagopalan, (supra) it was observed that where the right to retrenchment compensation which is the foundation of the claim is itself a matter which is exclusively within the competence of the Industrial Tribunal to be adjudicated upon on a reference, it would be straining the language of Section 33C(2) to hold that question whether there has been retrenchment may be decided by the Labour Court. Where retrenchment is conceded and the only matter in dispute is that no liability to pay compensation has arisen the Labour Court will be competent to decide the question. In such a case the question is one of computation and not of determination of the conditions precedent to the accrual of liability. Where, however the dispute is whether work-men have been retrenched and computation of the amount is subsidiary or incidental, the Labour Court will have no authority to trespass upon the powers of the Tribunal with which it is statutorily invested. It was, therefore, held that the Labour Court was incompetent to decide the applications of the workmen.

12. In C.I.W.T. Corporation v. Workmen. : [1975]1SCR153 , a company closed its business and the corporation to which the company's undertaking was transferred appointed a large number of the company's employees by fresh letters of appointments, but it could not absorb all of them. In an application under Section 33C(2) by the employees, who were not employed by the corporation it was contended that the Labour Court had no jurisdiction to entertain the application. The Supreme Court held that the proceeding under Section 33C(2) is in the nature of an execution proceeding where the Labour Court calculates the amount of money due to a workman or the value of the benefit to which he is entitled. This calculation follows upon an existing right to the money or benefit in view of its being previously adjudged or otherwise duly provided for. It may be necessary to determine the identity of the person by whom or against whom the claim is made if there is a challenge on that score. But that is merely 'incidental'. The Labour Court cannot arrogate to itself the functions say of an Industrial Tribunal which alone is entitled to make adjudications regarding the workmen's right to relief or the corresponding liability of the employer by dubbing as 'incidental' to its main business of computation. The several problems raised in the contentions of the employer involve in effect a major industrial dispute, an investigation into which is quite outside the scope of Section 33C(2). Only on a detailed investigation would it be possible to determine whether the workmen had any right to a benefit and if so the corporation is liable to satisfy the same. The other question which would be necessary to decide was whether the corporation was a successor of the defunct company. That question would involve consideration of several factors and an investigation into them would be clearly outside the speedy remedy contemplated by Section 33C(2) In short, the problems raised were appropriate for determination in an Industrial Dispute on a reference under Section 10 of the Act and cannot be regarded as merely 'incidental ' to the computation under Section 33C(2) On the other hand in S. Arcot Electricity distribution v. Mohammed Khan 1970-II L.L.J. 44, a co. was taken over by the Government and when the employees filed an application for retrenchment compensation under Section 25FF of the Act, the company contended that right accrued under Section 25FF was deflated because of the compliance of conditions laid down in the proviso, and the liability was on the State of Madras and the Labour Court had no jurisdiction in an application under Section 33C(2) to decide these questions. The Supreme Court held that the right claimed by the workers was a right accrued to them under Section 25FF and a mere denial of the right by the company cannot take away the jurisdiction of the Labour Court.

13. Similarly in Sahu Minerals Ltd. v. Presiding Officer 1975 II L.L.J. 341 : (1975) Lab. I.C. 1224 (S.C.) in an application under Section 33C(2) the employer contended that it was a case of closure for the reason beyond its control and, therefore, the workmen were entitled to compensation under the proviso to Section 25FFF(1) of the Act and not to retrenchment compensation whereas the workers contended that they were entitled to retrenchment compensation under Section 25F. The Supreme Court held that it was competent to the Labour Court to decide whether the case before it fell under the proviso to Sub-section (1) of Section 25FFF or it was a case of retrenchment compensation.

14. These decision of the Supreme Court falling on either side of the line indicate the difficulty of the Court in arriving at a decision in each particular case. In the case before us the contention of the employer, is that the employees agreed that they would leave the service of the company of their own accord provided they were paid arrears of bonus and salary immediately and arrangements were made to pay the gratuity and the management agreed to the said proposals and this was not, therefore, a case of retrenchment at all. In other words the very fact of retrenchment on which the application was based is disputed by the employer. We. therefore, consider this case falls squarely within the principle laid down by the Supreme Court in U.P. Elec. Supply Co. v. R.K. Shukla : (1969)IILLJ728SC and the question whether in fact there was retrenchment or not cannot be decided by the Labour Court in an application under Section 33C(2). We are satisfied that the denial of retrenchment in this case cannot be said to be made merely with a view to oust the jurisdiction of the Labour Court. It is true as pointed out by the learned Counsel for the respondent that in the office order issued to the respondents the expression 'retrenched' is used. But it is the case of the employer that this was done in order to enable the workmen to get their gratuity quickly as otherwise it would take several months for them to obtain the gratuity. On the other hand, the respondent in W.P. 3431/76 admitted in his deposition that during the discussions with the petitioner all agreed to leave the company after receiving one month's pay and gratuity without asking for other benefits and it was in pursuance of that agreement the amount covered by Ext. W 3 was paid to him. This would indicate that the question whether the employees were retrenched or they left services of their own accord is not a matter free from doubt and the contention was not raised merely with a view to get over the jurisdiction of the Labour Court. Such a matter would be one which would more appropriately be decided when raised as a dispute by the Industrial Tribunal.

15. The learned Counsel for the respondent placed considerable reliance upon the decision in Sahu Minerals Ltd. v. Presiding Office 1975-II L.L.J. 341 and S. Arcot Electricity Distribution v. Mohammed Khan 1970-II L.L.J 44, (supra) already referred to and said that even in those cases the question was whether the employees were retrenched and were, therefore, entitled to retrenchment compensation and the Supreme Court held that the Labour Court had jurisdiction to go into the question whether there was retrenchment or not. In our view the facts in the present case are distinguishable from those before the Supreme Court in the two cases. In Sahu Minerals Ltd. v. Iresiaing Officer 1975-II L.L.J. 341 : (1975) L.I.C. 1224 S.C. the Supreme Court pointed out that the employer did not dispute that the workmen were entitled to compensation. It only said that the compensation should be calculated on a particular basis different from the basis on which the workmen claim ed. Similarly in S. Arcot Electricity Distribution v. Mohammed Khun (supra) the Supreme Court held that the right claimed by the employees was an existing right and the mere denial of the right could not take away the jurisdiction of the Labour Court. Referring to the decision in Central Bank of India Ltd. v. Rajagopalan (supra) the Supreme Court reiterated that the workman cannot put forward a claim in respect of a matter which is not based on an existing right and which cannot be appropriately the subject-matter of an industrial dispute only requiring reference under Section 10 of the Act. We are of the view that the facts in the case before us are more akin to those in U.P. Elec. Supply Co. v. R.K. Shukla (1970) L.I.C. 276, than in Sahu Minerals Ltd. v. Presiding Officer and S. Arcot Electricity Distribution v. Mohammed Khan (supra).

16. For the above reasons we agree with the contention of the writ petitioner that the Labour had no jurisdiction to entertain the application under Section 33C(2). The order of the Labour Court is quashed and the writ petitions are allowed but in the circumstances without costs.

17. In the view we have taken regarding the jurisdiction of the Labour Court it is unnecessary for us to consider the other contentions.


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