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All India Insurance Emyloyees' Assn. and Ors. Vs. Union of India (UOi) and Ors. (21.05.1976 - CALHC) - Court Judgment

LegalCrystal Citation
SubjectLabour and Industrial
CourtKolkata High Court
Decided On
Judge
Reported in(1977)ILLJ415Cal
AppellantAll India Insurance Emyloyees' Assn. and Ors.
RespondentUnion of India (UOi) and Ors.
Cases ReferredTatn Engineering and Locomot v. Co
Excerpt:
- .....of the sad settlement would be subject to the approval of the board of the corporation and of the central government.3. pursuant to the aforesaid, the said settlement received the approval of the board of the corporation and of the contral government and in terms thereof bonus was paid to the employees as aforesaid for the period from april 1, 1973 to march 3th, 1974 along with their salary for the month of april, 1974 and, thereafter, for the similar period which was paid along with the salary for the month of april, 1975. difficulties arose with regard to the payment of such salary for the period commencing from april i, 1975 to march 31, 1970 which was to become payable along with the month of april, 1976. it is to be noted that nobody disputes the legality or correctness or validity.....
Judgment:

R.M. Dutta, J.

1. The Rule nisi herein was directed against the Union of India and the different authorities of the Life Insurance Corporation of India, (hereinafter called the laid Corporation), calling upon them to show cause why a writ in the nature of mandamus and a writ in the nature of prohibition should not be issued against them, commanding the said respondents and each of them to act according to law, by directing the respondents to act is accordance with a settlement, dated January 24, 1974 read with an administrative instruction, dated March 29, 1974; by re-calling, rescinding and/or canceling the impugned circulars, dated September 26, 1975, February 7, 1976 and March 11, 1976, being anuexures to the petition j by not acting in any manner whatsoever on the basis of the said impugned circulars; and further, by not refusing to pay the annual cash bonus to the Class III and Class IV employees of the respondent No. 2, the employees of the said Corporation including the petitioners herein along with their salary for the month of April, 1976 and thereafter every year as provided by the said settlement.

2. The facts shortly are that, at all material time, the employees of the said Corporation had been receiving the non-profit sharing bonus since June, 195) under several agreements or settlements arrived at by and between the said Corporation and the different employees' associations of the said Corporation. This was bang so done by virtue of orders made under Section 11 of the Life Insurance Corpora ion Act, 1956. The standardization order of 1957 was modified and/or amended from time to time for the purpose of payment of bonus to the Class III and Class IV employees of the Corporation and ever since 1959, the said Corporation made various settlements and/or agreements, nitro alia, in respect of claim for bonus of the said Class 111 and Class IV employees of the said Corporation, the last of such settlements being arrived at on January 24, 19/4 by and between the said-Corporation on the one hand and the petitioner Nos. 1 to 5, being the different trade onions-representing the workmen of the Life Insurance Corporator of India on the other. It is also provided by the said settlement that the same would be effective from April 1, 1973 and would be for a period of four years, that is, from April 1, 1973 to March 31, 1973. It is further provided thereunder that the terms of the sad settlement would be subject to the approval of the Board of the Corporation and of the Central Government.

3. Pursuant to the aforesaid, the said settlement received the approval of the Board of the Corporation and of the Contral Government and in terms thereof bonus was paid to the employees as aforesaid for the period from April 1, 1973 to March 3th, 1974 along with their salary for the month of April, 1974 and, thereafter, for the similar period which was paid along with the salary for the month of April, 1975. Difficulties arose with regard to the payment of such salary for the period commencing from April I, 1975 to March 31, 1970 which was to become payable along with the month of April, 1976. It is to be noted that nobody disputes the legality or correctness or validity of the said settlement of January 24, 1974.

4. The said Corporation by its Circular No. 3539/ASP/75, dated September 26, 1875 directed all us offices not to pay bonus in the event of retirement and death since the question of payment of bonus was being reviewed in the light of the Bonus Ordinance, dated September 25. 1975. Ibis is the first circular which is under challenge. On behalf of the employees it was inter aula represented to the authorities that laymen of bonus was governed by the provisions of a bi-partita settlement, and directive to the contrary was violative of both the settlements and also of the employees' conditions of service, and, therefore, illegal and void. Accordingly, the authorities were called upon to rescind the said circular and to order payment of bonus to the employees who retired or died in harness.

5. Thereafter, by his letter, dated February 7, 1976 (also described hereto as circular), the Chief Personnel Officer of the Corporation informed the Chief Secretary to the petitioner No. 1 that although the Corporation admitted that payment of bonus to employees was covered by the settlement of January. 1974, yet such payment was subject to such direction as the Central Government might issue from time to time, it was also intimated that the Central Government had advised the said Corporation not to pay any bonus without their specific approval. Accordingly, bonus could not be paid to the employees covered by the circular, dated September 26, 1975. The Chief Secretary of the petitioner No 1 again protested and intimated, that once the said settlement became part of the service condition, the payment of bonus according to the settlement was automatic and not subject to any fresh approval of the Central Government every year. The said authority was also reminded that the settlement of January, 1974 had passed through various stages of consultation with and concurrence of the Central Government, and accordingly, its terms and conditions could not be unilaterally altered It was further pointed out that the Payment of Bonus Act could not touch the settlement of January. 1974, because the said Corporation was never covered by the said Act. It is to be noted that even though it was specifically pointed out as on February 7, 1976 by the Chief Personnel Officer of the said Corporation that the Central Government had advised them not to make any payment of bonus without their specific approval, yet at the hearing stage it was pointed out that there was actually no directive of the Central Government to stop payment of bonus so far as the said Corporation was concerned. Accordingly, the contention raised in that letter was without any basis whatsoever. This letter dated 7th February, 1976, (also called circular herein), is also under challenge in this writ petition.

6. Thereafter, the petitioners again made their demand by their union's letter, dated March 1 , 1976 to the Chairman of the said Corporation and ultimately on March 22, 1976 the Executive Director (P) of the said Corporation by a Circular No. 3338/ASP/96 directed all the offices of tie said-Corporation that until further instruction no payment by way of bonus be made to any employee if proactive of the class to this he might belong on the ground that the question of payment of bonus to the employees of the Corporation was under review and no decision bud 10 far been taken about the payment of bonus for the year 1975-76 The last circular, dated March 2, 1986 is also the subject-matter of this writ petition along with the previous circular, dated September 26, 1975 and the directions contained in the said letter, dated February 7, 1976.

7. Under those circumstances the petitioners moved the writ jurisdiction of this Court and a Ruler nits was issued as aforesaid. Thereupon by an interim order it was ordered that the payment of salary for April, 1976 and the acceptance thereon by the employees without payment of bonus along with it would not prejudice the rights of the petitioners. On the basis as afore-said the salaries for the month of April, 1976 were paid to and accepted by the petitioners.

8. When the matter was moved for further interim orders several important points were urged by and on behalf of all the parties herein, but considering the imp trance of the matter directions were given, so that the Rule itself might be heard indisposed of and, accordingly the matter has come up for final disposal of the Rule.

9. Incidentally it should be mentioned here that at the lime the petition was moved for interim orders Mr. Banerjee, learned Counsel appearing on behalf of the said-Corporation upon instructions stated to the Court that by virtue of the Central Government s directive the authorities of the (aid-Corporation were prevented fn m making the payment or bonus and prayed for leave to tile a supplementary affidavit disclosing therewith such directive or the Central Government. The leave, as prayed for, was granted and upon that a supplementary affidavit was filed by one Harish Chandra Pal affirmed on May 10, 1976 therewith a demi official confidential letter written by one O.K. Singh, Director, Government of India, Ministry of Finance, Insurance Wing and addressed to the Chairman of the Corporation, whereby the said Chairman was requested 'not to make any further payment of bonus without getting the same cleared by the Government'. Yesterday, at the hearing of the Rule Mr. Banerjee, learned Counsel for the Corporation upon instructions stated in Court that he has lance received instructions from his clients to state that there is no directive from the Central Government directing the Life Insurance Corporation of India not to make any payment of bonus. Under those circumstances, since it is conceded that there is no such directive from the Central Government, the arguments made by Mr. Beaneries at the time of obtaining interim orders, regarding Regulation 58 of the Life Insurance Corporation's Staff Regulations, 1960 relating to payment of bonus at the time of interim orders, and its impact on the powers of the Central Government in withholds g its approval in the matter of settlement, would no longer be relevant for the purpose of the Court's consideration in deciding this case.

10. Mr. Chatterjee, learned Counsel, appearing on behalf of the petitioners con-tends that by virtue of the said Memorandum of Settlement, dated January 24, 1974 the petitioners received the bonus for the last two years along with the payment of salary for the months of April, 19 4 and April, 1975 and that was so done on the basis of the approval received both from the Corporation and from the Central Government. The settlement was to remain effective for four consecutive years and by virtue of the said settlement another year s bonus was to become duo on 1st April, 1976 and has since actually become due and the Corporation, accordingly, was obliged to pay the same along with the salary for the month of April, 1976. It is not in dispute that such previous payments of bonus were made on the bails of the Central Governments approval. Now that it is conceded that there is no such directive of the Central Government as was sought to be made out previously, withholding such sanction, there could not be any point in withholding the payment of such bonus of the ground that the same was under review of the Central Government. Accordingly, such nonpayment becomes atwitter male fide and illegal and as such, this Court in its writ jurisdiction can require the authorises of IBS said Corporation to at in accordant with law, so that conscionable justice could be done to the employees. Mr. Banerjee on the other hand contends that it is not a case where payment bas been refused. Such payments are now under review and as soon as final decision would be arrived at, an action would be taken in respect thereof.

11. To my mind the said circulars and the letter, referred to above, clearly show that the offices of the said-Corporation have been directed cot to make any payment of bonus to any of the employees for the year. ending March 31, 1976 and also in respect of the employees covered by the circular, dated September 26, 1975 and the letter, dated February 7. 1976. That being the positional, to my mind, without anything more, the authorities of the Life Insurance Corporation of India must be held to be acting arbitrarily, without any cause and without any legal authority, a is a stautory body Corporation created under the Life insurance Corporation Act, 1956. It bound to act according to the law of the land and not arbitrarily and in the manner it is purporting to do. There must be legitimate foundation for the exercise of its jurisdiction and to support its ac ion it must act within the scope of its authority vested of it. If it acts in excess of is powers then the writ Court jurisdiction can be utilized to set it right, (see also Halberd's Lays of England, 4th Edition, Volume 1, paragraph 2). It has been observed by the Supreme Court in the case of Satwant Singh v. D.R maratnam, A.P.O. New Delhi : [1967]3SCR525 as follows:

One of the aspects of rule of law is that every executive action, if it is to operate to the prejudice to any person, must be supported by some legislative authority.

12. Even though the petitioners' right arises out of a contract yet the writ Court has ample jurisdiction to give relief to the petitioners. In the case of D.F.O South Kheri v. Ram Sanehi : AIR1973SC205 , It has been held that 'where the action of & public authority invested with statutory powers is challenged, the writ petition is maintainable even if the right to relief arises out of an alleged breach of contract'. Even though the order is an administrative order yet it has to be exercised by the statutory authority is accordance wither principles of natural justice when it purports to affect the litigant's right to property.

13. In the case of Deokinandan Prasad v. Stan of Bihar [1971-I L.L.J 557], the Supreme Court considered the case of pension and held that pension was not a bounty pa>able on the sweet will and pleasure of the Government and that the tight to pension was a valuable right vesting on a Government servant. In the case before me the bonus baa accrued due, it has been earned and is payable for to with in terms of the said settlement If nothing stands in the way of such payment, the non-payment thereof becomes an arbitrary act of the part of the authorities concerned. To my mind, the right to receive the bonus along with the salary of April, 1976 is a right to property under Article 31(1) Of the Constitution of India and this right cannot he taken away by an executive direction. To my mind, the authorities of the Life Insurance Corporation of India are arrogating to themselves some powers which they do not possess in withholding payment of such bonus and there by exceeding their statutory powers. (See the case of State of Mysore and Ors. v. K.C. Adiga. : AIR1976SC853 ). Even though the petitioners are being deprived of such right to property yet the respondent No. 2, the said Corporation, did not even think fit to give the petitioners a right of hearing before deciding to withhold payment and by doing so they have acted in violation of the principles of natural justice. That the authorities concerned are obliged to follow the said rule of natural justice has been considered by the Supreme Court in the case of State of Punjab aha another v. Igbal Singh [1976-II L.L.J. 377] A.I.R. 1970 S.C. 667.

14. On behalf of the respondent No. 2, Life Insurance Corporation of India, Mr. Banerjee contends that the lights, if any, of the petitioners can only be agitated before the Labour Court under the Industrial Disputs Act, 1947, because this is a case essentially coming within Section 33(C) of the Industrial Disputes Act. 1947. It is contended that even though the said circulars are quashed, yet the Court cannot make any order for payment of bonus because in respect of each employee it would be a matter of computation and such matter can be agitated only under Section 33(C) of the Indus, trial Disputed Act, 1947. To my mind, this argument cannot stand inasmuch as this Court in its writ jurisdiction would only direct, the authorities concerned, if at all, to act in accordance with law and in respect of such an order no computation would be involved, it is a matter for the department of the respondent No. 2 Corporation to calculate. If there would be any Dispute certainly that might be agitated under the relevant provisions of law. But in so far as the piayers in the petition are concerned, the came can undoes edgy be agitated only before this Court. this Court alone in its writ jurisdiction can entertain such powers. In my opinion, the principles laid down in the Premter Automobiles Ltd. V. Kamalakar Shantarom Wadke and other. [1975-II L.L J. 445]; A.I.R. 1975 S.C. 7238, have mo application in a writ application, because it is only the writ Court which can exercise this jurisdiction and the Tribunal or the Labour Court cannot entertain such prayers.

15. To my mind, in this case the authorities concerned are acting arbitrarily, in excess of their statutory powers and without due sanction of law, and, accordingly, even assuming there is an alternative remedy provided by any statute, yet a petition under Article 226 of the Constitution will give the petitioners quicker and more efficacious remedy, as is the case here, and, accordingly, this Court has jurisdiction to try and to entertain this application in its writ jurisdiction (sec the case of L. Hirday Narain v. Income-tax Officer, Bareilly : [1970]78ITR26(SC) ; Tatn Engineering and Locomot v. Co, Ltd. V. The Assistant Commissioner of Commercial Taxes and Anr. : [1967]2SCR751 ).

16. On behalf of the Central Government Mr. Ray, referred to a bill in the Parliament whereby the payment of bonus to the Corporation employees under the laid settlement is being considered by the Parliament, To my mind until the Bill ii enacted the Court has to consider the case OL the basis of the law of the land as s prevailing at present and it is not the Court's consideration as to which provision thereof might be passed and enacted and which provision not.

17. Under those circumstances, to my mind the petitioners are entitled to succeed in ibis application, and accordingly I make this Rule absolute.

18. Let a writ of mandamus and of prohibition issue, as prayed for in the petition and it is further ordered that the order in terms of prayer A (iii) of the petition be read with the interim order passed herein on April 26, 1976.

19. In the facts and circumstances of this case, there would be no order as lo costs.


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