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Bengal Nagpur Cotton Mills Ltd. Vs. State of Madhya Pradesh and ors. - Court Judgment

LegalCrystal Citation
SubjectLabour and Industrial
CourtMadhya Pradesh High Court
Decided On
Case NumberMisc. Petn. No. 226 of 1959
Judge
Reported inAIR1960MP319; [1960(1)FLR152]; (1960)IILLJ551MP
ActsIndustrial Disputes Act, 1947 - Sections 25FFF, 33C and 33C(1)
AppellantBengal Nagpur Cotton Mills Ltd.
RespondentState of Madhya Pradesh and ors.
Appellant AdvocateA.P. Sen, Adv.
Respondent AdvocateM. Adhikari, Adv. for Respondents (Nos. 1 to 5)
DispositionPetition allowed
Cases ReferredS. S. Shetty v. Bharat Nidhi Ltd
Excerpt:
.....prejudice to any other mode of recovery, make an application to the appropriate government for the recovery of the money due to him, and if the appropriate government is satisfied that any money is so due, it shall issue a certificate for that amount to the collector who shall proceed to recover in the same manner as an arrear of land revenue. va before the recovery at it can be ordered under section 33c(1). section 33c(1) no doubt says that the appropriate government, if satisfied that any money is due, shall issue a certificate for the recovery of that amount. where any money is due to a newspaper employee from an employer under any of the provisions of this act, whether by way of compensation, gratuity or wages,'the newspaper employee may, without prejudice to any other mode of..........observations are, in our opinion, conclusive of the matter. it must, accordingly, be held that no recovery of money due to a workman from an employer under the provisions of chapter va of the act can be ordered under section 33c unless the money has been first ascertained.8. we are not called upon to decide the question as to the competent authority, and the proper procedure to be followed, for determination of the amount of compensation payable to workmen under section 25fff. in sree behariji mills ltd. v. state of bihar, air 1957 pat 488, it was observed that section 33c(1) expressly granted power to the appropriate government to make an enquiry about the legal liability of the employer to pay compensation under any provisions of chapter va. we do not find any words in section 33c(1).....
Judgment:

Dixit, C.J.

1. This is an application under Article 226 of the Constitution of India for quashing the certificates issued by the Labour Commissioner under Section 33C of the Industrial Disputes Act, 1947, for recovery of certain amounts said to be due from the petitioners and for quashing the notice of demand served by the Tehsildar, Rajnandgaon, on the basis of those certificates.

2. The petitioner is a public limited company which has been carrying on the business of manufacturing cotton textiles at Rajnandgacn. In 1959 the management decided to close down the working of the mills on the grounds of rise in labour and manufacturing costs, uneconomic work-big, absenteeism amongst workers, and financial difficulties. Accordingly the mills were closed from 6-9-1959. The validity of the closure was upheld by the State Industrial Court by its order in Industrial Application No. 67 of 1959 dated 4-9-1959. Thereafter on applications made by certain workers and at the instance of the Rashtriya Mill Maz-door Sangh, Rajnandgaon, the Labour Commissioner made calculations of the amount of compensation payable to the various employees under Section 25FFF of the Act and issued certificates for the recovery of a total amount of Rs. 14,66,229/-from the mills as arrears of land revenue. Pursuant to these certificates, the Tehsildar of Rajnandgaon served a notice of demand under Section 134 of the Madhya Pradesh Land Revenue Code, 1954, calling upon the mills to pay the said amount within one day.

In the recovery proceedings before the Tehsildar the petitioner questioned the validity of the certificates and the notice of demand issued to them. But the Tehsildar overruled the objection holding that he could not enquire into the validity of the certificates issued by the Labour Commissioner. The petitioner-mills then went up in appeal before the Sub-Divisional Officer, Rajnandgaon, and prayed for an order staying the recovery proceedings. When their prayer was refused, they filed this application.

3. The petitioner contends that the Labour Commissioner had no jurisdiction to issue certificates under Section 33C when the amount of compensation payable to the workers of the mills had not been adjudicated upon by the competent authority and that without this adjudication there could be no question of recovery of any amount under Section 33C. In the return filed by the opponents Nos. 1 and 2, it has been averred that the matter of amount of compensation payable under Section 25FFF being merely one of arithmetical calculation from the register of the employees maintained by the mills, the Labour Commissioner himself could determine the amount and order its recovery under Section 33C,

4. The question raised here is, thus, whether the Labour Commissioner acted legally in issuing the certificates of recovery when the amount of compensation payable to the workers had, as contended by the petitioner-mills, not been determined before by any competent authority. The relevant statutory provisions are Sections 25FFF and 33C of the Act. They are as follows:

25FFF :--'1. Where an undertaking is closed down for any reason whatsoever, every workman who has been in continuous service for not less than one year in that undertaking immediately before such closure shall, subject to the provisions of Sub-section (2), be entitled to notice and compensation in accordance with the provisions of Section 25F, as if the workman had been retrenched:

Provided that where the undertaking is closed clown on account of unavoidable circumstances beyond the control of the employer, the compensation to be paid to the workman under Clause (b) ot Section 25F shall not exceed his average pay for three months. Explanation:-- An undertaking which is closed down by reason merely of financial difficulties (including financial losses) or accumulation of undisposed of stocks shall not be deemed to have been closed down on account of unavoidable circumstances beyond the control of the employer withinthe meaning of the proviso to this sub-section.

* * * * *33C. '1. Where any money is due to a workman 'from an employer under a settlement or an award or under the provisions of Ch. VA, the workman may, without prejudice to any other mode of recovery, make an application to the appropriate Government for the recovery of the money due to him, and if the appropriate Government is satisfied that any money is so due, it shall issue a certificate for that amount to the Collector who shall proceed to recover in the same manner as an arrear of land revenue.

2. 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).

3. For the purposes of computing the money value of a benefit, the Labour Court may, if it so thinks fit, appoint a commissioner who shall, after, taking such evidence as may be necessary, submit a report to the Labour Court and the Labour Court shall determine the amount after considering the report of the commissioner and other circumstances of the case.'

5. The argument of Shri Sen, learned counsel appearing for the petitioner, was that Section 83C (1) contemplated prior, determination by a competent authority of the amount actually due to the employees from the management; that the provision was, so to say, a stage of execution following the passing of a decree or the making of an award or an order by an appropriate Court or authority; that it was only after the amount due to the employees had been fully determined that the stage of recovery of that amount could be reached and it was at that stage that the advantage provided by Section 33C(1) was given to the employees without prejudice to any other mode of recovery available, to them; and that mere making of a claim for payment did not invest any jurisdiction in the Labour Commissioner exercising the power of the State Government to issue a certificate for recovery.

In reply, learned Advocate-General said that no enquiry was necessary for determination of the amount of compensation payable to the employees; and that as the service record of the employees was available and the wages paid to them were also known, the Labour Commissioner had only to calculate the amount of compensation payable to them and issue a certificate for the recovery of that amount.

6. In our opinion, the contention advanced by the learned counsel for the petitioner must be given effect to. The argument of the learned Advocate-General does not seem to us, to be in accord with the language of Sections 25FFF and 33C. Section 33C(1) speaks of recovery of any money due to a workman from an employer under a settlement or an award or under the provisions of Ch. VA. Now, an amount 'due' means an amount which has been ascertained and has become payable. Section 33C(1), therefore, deals with the recovery of an amount which has already been ascertained and not with the ascertainment of any amount payable to the employee. The amount due to a workman from an employer under a settlement or an award may be an ascertained amount.

But the same cannot be said of an amount due to him under the provisions of Ch. VA. This has to be determined in accordance with the relevant provisions of Ch. VA before the recovery at it can be ordered under Section 33C(1). Section 33C(1) no doubt says that the appropriate Government, if satisfied that any money is due, shall issue a certificate for the recovery of that amount. But this satisfaction of the appropriate Government is not for the purpose of the ascertainment of the amount. It is with regard to the question whether any ascertained amount payable to the worker has or has not been paid to him, or whether any balance is still due to him. That the question of recovery of any amount cannot arise unless it is first ascertained is a proposition obvious enough. That the amount of compensation payable to workmen in case of closing down of an undertaking is not always a mere matter of calculation from the muster-rolls maintained by the undertaking becomes plain from the provisions of Section 25FFF. The amount of compensation payable under the said provision has to be ascertained with reference to the continuity of service of the workman during the prescribed period and in accordance with the provisions of Section 25F and also with reference to the question whether the undertaking was closed down on account of unavoidable circumstances beyond the control of the employer. Where the undertaking is closed on account of unavoidable circumstances beyond the control of the employer, the compensation to be paid to workmen cannot exceed his average pay for three months.

Again, under the Explanation to Section 25FFF, an undertaking which is closed down by reason merely of financial difficulties (including financial losses) or accumulation of undisposed of stock is not taken to have closed down on account of unavoidable circumstances beyond the control of the employer within the meaning of the proviso to Sub-section (1) of Section 25FFF. Without an adjudication on all these points, the compensation payable to workmen under Section 25FFF cannot be determined, and unless it is determined there cannot be any recovery of that amount under Section 33C. Here, admittedly, there was no ascertainment of the amount of compensation payable to workmen under Section 25FFF. Consequently, the Labour Commissioner had no jurisdiction to issue certificates for the recovery of the amount of compensation calculated by himself on the basis of the registers maintained by the petitioner-mills.

7. This conclusion is confirmed by the decision of the Supreme Court in Kasturi and Sons (Private) Ltd. v. Salivateswaran, AIR 1958 SC 507. The decision of the Supreme Court was under the Working Journalists (Conditions of Service and Miscellaneous Provisions) Act, 1955. The Supreme Court considered the scope and effect of Section 17 of that Act which provides:

'Where any money is due to a newspaper employee from an employer under any of the provisions of this Act, whether by way of compensation, gratuity or wages,' the newspaper employee may, without prejudice to any other mode of recovery, make an application to the State Government for the recovery of the money due to him, and if the State Government or such authority and the State Government may specify in this behalf is satisfied that any money is so due, it shall issue a certificate for that amount to the Collector and the Collector shall proceed to recover that amount in the same manner as an arrear of land revenue.'

So far as the question here is concerned, there is no material distinction between Section 17 of the Act referred to above and Section 33C of the Industrial Disputes Act, 1947. The petitioner's argument in the present case is precisely that which was advanced on behalf of the employer in AIR 1958 SC 507 (supra) and which was accepted by the Supreme Court. The Supreme Court stated the argument and their acceptance of it thus:

'On the other hand, the case for the petitioner is that the section provides for a procedure to recover the amount due from an employer, not for the determination of the question as to what amount is due. The condition precedent for the application of Section 17 is a prior determination by a competent authority or the Court of the amount due to the employee from his employer. It is only if and after the amount due to the employee has been duly determined that the stage is reached to recover that amount and it is at this stage that the employee is given the additional advantage provided by Section 17 without prejudice to any other mode of recovery available to him. According to this view, the State Government or the authority specified by the State Government has to hold a summary enquiry on a very narrow and limited point: Is the amount which is found due to the employee still due when the employee makes an application under Section 17, or, has any amount been paid, and, if yes, how much still remains to be paid? It is only a limited enquiry of this type which is contemplated by Section 17. Within the scope of the enquiry permitted by this section are not included the examination and decision of the merits of the claim made by the employee. When the section refers to the application made by the employee for the recovery of the money due to him, it really contemplates the stage of execution which follows the passing of the decree or the making of an award or order by an appropriate Court or authority. In our opinion, the construction suggested by the petitioner should be accepted because we feel that this construction is more reasonable and more consistent with the scheme of the Act,'

It was further pointed out in paragraph 11 of the judgment that Sub-section (1) of Section 33C of the Industrial Disputes Act is modelled on the provisions of Section 17 of the Working Journalists (Conditions of Service and Miscellaneous Provisions) Act, 1955. The Supreme Court's observations are, in our opinion, conclusive of the matter. It must, accordingly, be held that no recovery of money due to a workman from an employer under the provisions of Chapter VA of the Act can be ordered under Section 33C unless the money has been first ascertained.

8. We are not called upon to decide the question as to the competent authority, and the proper procedure to be followed, for determination of the amount of compensation payable to workmen under Section 25FFF. In Sree Behariji Mills Ltd. v. State of Bihar, AIR 1957 Pat 488, it was observed that Section 33C(1) expressly granted power to the appropriate Government to make an enquiry about the legal liability of the employer to pay compensation under any provisions of Chapter VA. We do not find any words in Section 33C(1) to support this proposition. As pointed out earlier, that section deals with the recovery of an amount already ascertained and not with the question of ascertainment of an amount due to a workman.

In South Arcot Electricity Distribution Co. Ltd. v. Elumalai, AIR 1959 Mad 401 Sub-section (2) of Section 33C was taken as providing a machinery for the ascertainment of monetary claims also under Sub-section (1). This view does not seem to be in consonance with the decision of the Supreme Court in S. S. Shetty v. Bharat Nidhi Ltd,, AIR 1958 SC 12, and the observations of the Supreme Court in paragraph 11 in AIR 1958 SC 507 on the scope and effect of Sub-sections (2) and (3) of Section 33C. Sub-section (2) of Section 33C relates not to what is prima facie money due under a settlement or an award or under the provisions of Chapter VA, but concerns cases of any benefit which is capable of being computed in terms of money. The computation of a benefit in terms of money is not ascertainment of a monetary claim under a settlement or an award or under the provisions of Chapter VA.

The money claimed as due referred to in Sub-section (1) of Section 33C being necessarily expressed in money, there can be no question of its computation in terms of money. Be that as it may, and whatever may be the proper authority and procedure for ascertaining the amount due under the provisions of Chapter VA, it is clear from the wording of Section 33O and the decision of the Supreme Court in AIR 1958 SG 507 (supra) that proceedings under Section 33C(1) for the recovery of any money due to a workman under the provisions of Chapter VA are not proceedings for the computation of the amount due to the workman and that it is only when the appropriate authority has made the computation in accordance with the proper procedure that a certificate for the recovery of that computed money as an arrear of land revenue can issue.

9. For these reasons, we are of the opinion that the certificates issued by the Labour Commissioner were wholly without jurisdiction and the notice of demand issued by the Tehsildar was also illegal. In the result, this petition succeeds and the certificates issued by the Labour Commissioner and the notice of demand issued by the Tehsildar are quashed. The respondents are restrained from recovering any amount from the petitioners on the basis of those certificates or the notice of demand. The petitioner shall have costs of this application Counsel's fee is fixed at Rs. 200/-. The outstand ing amount of security deposit shall be refunded to the petitioner.


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