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Sahu Minerals and Properties Ltd. Vs. Presiding Officer, Labour Court and ors. - Court Judgment

LegalCrystal Citation
SubjectLabour and Industrial
CourtSupreme Court of India
Decided On
Case NumberCivil Appeal Nos. 1266 and 1267 of 1969
Judge
Reported inAIR1975SC1745; [1975(31)FLR162]; (1975)IILLJ341SC; (1976)3SCC93; [1976]1SCR263; 1975(7)LC607(SC)
ActsIndustrial Disputes Act - Sections 10, 25F, 25FF, 25FFF(1), 33C(1), 33C(2) and 33C(3)
AppellantSahu Minerals and Properties Ltd.
RespondentPresiding Officer, Labour Court and ors.
Appellant Advocate H.K. Puri and; K.K. Mohan, Advs
Respondent Advocate D. Goburdhan and ; A.K. Nag, Advs.
Cases ReferredSouth Arcot Elect. Co. v. N.K. Khan
Prior historyFrom the Judgment and Order dated 29th July 1968 of the Patna High Court in Civil Writ Jurisdiction Case No. 61 of 1967
Excerpt:
.....to labour court some applications in respect of workers for decision under section 33 c (2) for retrenchment compensation - employer contended that it was a case of closure for reasons beyond its control and workmen entitled to compensation under section 25fff - labour court held that it was case of retrenchment compensation under section 25f - employer agreed to compensate workers but wanted to calculate it in another manner - compensation to be given - matter decided by labour court in its capacity - no error on part of labour court and decision upheld. - - filed by the employer before the high court of patna failed and these appeals have been filed in pursuance of a certificate of fitness granted by the high court. the said case is clearly distinguishable on the peculiar facts as..........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 has 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 if it only if the labour court answers this point in favour of the workman that the next.....
Judgment:

A. Alagiriswami, J.

1. By two notifications dated 22-6-65 and 28-8-65 the Government of Bihar sent to the Labour Court. Chota Nagpur Division, Ranchi applications in respect of 73 workers of the appellant for decision under Section 33C(2) of the Industrial Disputes Act for retrenchment compensation. The employer contended that it was a case of closure for reasons beyond its control and that therefore the workmen were entitled to compensation under the proviso to Sub-section (1) of Section 25FFF of the Act and not to retrenchment compensation. The workers contended, however, that they were entitled to retrenchment compensation under Section 25F. The Labour Court held that it was a case of retrenchment. Two writ petitions; filed by the employer before the High Court of Patna failed and these appeals have been filed in pursuance of a certificate of fitness granted by the High Court.

2. The argument on behalf of the appellant is that where there is a dispute before the Labour Court considering an application under Section 33C(2) as to whether the workmen had been retrenched or the factory had been closed for reasons beyond the control of the employer, it was not a matter which the Labour Court was competent to decide and that it was a matter which only an Industrial Tribunal considering a reference under Section 10 is competent to decide. In particular Item 10 of the Third Schedule to the Act is relied upon to show that the matter relating to retrenchment and closure is one which only ah Industrial Tribunal is competent to decide. Reliance is placed upon a decision of this Court in U.P. Elect. Co. v. R.K. Shukla : (1969)IILLJ728SC where it was that the power of the Labour Court is to compute the compensation claimed to be payable to the workmen on the footing that there has been retrenchment of the workmen, that where retrenchment is conceded and the only matter in dispute is that by virtue of Section 25FF no liability to pay compensation has arisen the Labour Court will be competent to decide the question, that in such a case the question is one of computation and not of determination, of the conditions precedent to the accrual of liability, and that where the dispute is whether work men have been retrenched and computation of the amount its subsidiary or incidental, the Labour Court will have no authority to trespass upon the power of the Tribunal with which it is statutorily invested.

3. In the U.P. Electric Company's case (supra) the facts were somewhat different. The Court in that case noticed at page 513 of the report that-

The Company had expressly raised a contention that they had not retrenched the workmen and that the workmen had voluntarily abandoned the Company's service by seeking employment with the Board even before the company closed its undertaking.

This Court emphasised at page 517 of the report that-

If the liability arises from an award, settlement or under the provisions of Ch. V-A or by virtue of a statute or a scheme made thereunder, mere denial by the employer may not be sufficient to negative the claim under Section 33C(2) before the Labour Court.

We, therefore, do not see how the decision in the U.P. Electric Company's case (supra) can come to the aid of the appellant in this case. The said case is clearly distinguishable on the peculiar facts as noticed above.

4. In Central Bank of India Ltd. v. PS. Rajgopalan : (1963)IILLJ89SC this Court considered the scope of Section 33C(2) elaborately and it would be necessary to quote at some length from that decision. In that case it was urged by employer that Section 33C(2) can be invoked by a workman who is entitled to receive from the employer the benefit there specified, but the right of the work man to receive the benefit has to be admitted and could not be a matter of dispute between the parties and that the only point which the Labour Court can determine is one in relation to the computation of the benefit in terms of money. This Court observed :

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 has 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 if it only if the Labour Court answers this point in favour of the workman that the next question of making 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 mean that it would be at the option of the employer to allow the workman to avail himself to 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 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 mean 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 outset the jurisdiction of the Labour Court to entertain the workman's application. The claim under Section 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 (1)'. We must accordingly hold that Section 33C(2) takes within its purview cases of workmen who claimed that the benefit to which 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 authorised 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 the held that what can be assigned to the Commissioner includes only a part of the assignment of the Labour Court under Sub-section (2)

(1) Maxwell on interpretation of statutes, p. 350.

5. Further on this Court observed:

It is thus clear that claims made under Section 33C(1), by itself can be only claims referable to the settlement, award or the relevant provisions of Chapter VA. These words of limitations are not to be formed in Section 33C(2) and to that extent, the scope of Section 33C(2) is undoubtedly wider than that of Section 33C(1).... It is unnecessary in the present appeals either to state exhaustively or even to indicate broadly what other categories of claims can fall under Section 33C(2). There is no doubt that the three categories of claims mentioned in Section 33C(1) fall under Section 33C(2) and in that scuse, Section 33C(2) can itself be deemed to be a kind of execution proceeding but it is possible that claims not based on settlements awards or made under the provisions of Chapter VA, may also be competent under Section 33C(2) and that may illustrate its wider scope.

6. This Court then went on to discuss some of the claims not fall under Section 33C(2), which is not very relevant for the purposes of this case. The present case stands on an even stronger footing. Even the employer does not dispute that the workmen are entitled to compensation. It only says that the compensation should be calculated on a particular basis different from the basis on which the workmen claim. The claims also falls under Chapter VA.

7. In the decision in South Arcot Elect. Co. v. N.K. Khan 1962 (2) SCR 902 where a right had been claimed by the various workmen in their application from under Section 33C(2), it was held that it was a right which accrued to them under Section 25FF of the Act and was an existing right at the time when these applications were made, that the Labour Court clearly had jurisdiction to decide whether such a right did or did not exist when dealing with the application under that provision, and that the mere denial of that right by the company could not take away its jurisdiction.

8. We hold that in this case it was competent to Labour Court to decide whether the case before it was a case of retrenchment compensation or the proviso to Sub-section (1) of Section 25FFF was attracted on closure of the establishment. The question even according to the employer falls under Section 25FFF and therefore in deciding that question the Labour Court has necessarily to decide whether the proviso has been satisfied.

9. We do not consider that the reference to item 10 of the Third Schedule to the Act can decide the matter one way or the other. The item reads as follows:

10. Retrenchment of workmen and closure of establishment.

10. It does not say that all questions arising out of retrenchment of workmen and closure of establishments have to be decided by Industrial Tribunal. Logically if the contention is to be accepted, even if the question of retrenchment is not disputed the Labour Court will not be competent to decide the question of compensation payable in a case of retrenchment because it cases a question of jurisdiction. This entry should therefore be refer to cases to where the right to retrench workers or to an establishment is disputed and that question is referred for adjudication to the Industrial Tribunal. In that case the Tribunal will be competent to decide whether the closure or retrenchment was justified and whether the retrenched workmen should be reinstated or the workers in the establishment purported to have been closed should be continued to be paid on the basis that the so-called closure was no closure at all. In the present case the workmen do not ask for reinstatement. They accept the termination of their services and ask for compensation. The only dispute is about the compensation whether it is to be paid under Section 25FFF. Item 10 of Third Schedule will not cover such a case.

11. We therefore uphold the decision of the High Court and dismiss these appeals with costs.


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